nVent Electric (NVT -1.84%) makes electrical connection and electrical systems protection equipment. It's not the most superficially exciting business in the world. Still, its investors won't care about that because their stock has increased by more than 400% over the last five years, presenting one of the best hidden ways to play the hot theme of investing in AI and data center spending.
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nVent positions itself for growth in AI-led data center spending
In the words of CEO Beth Wozniak on the second-quarter earnings call, nVent has become "a more focused, higher-growth electrical connection and protection company." That's come about through management's divestiture of its thermal management business in 2025 for $1.75 billion, and targeted acquisitions of infrastructure solutions businesses from Avail for $975 million (enclosures, switchgear and bus systems for infrastructure, power utilities, data centers, and renewables) and the $695 million acquisition of Trachte in 2024 (protection enclosures for power utilities, data centers, and renewables).
In addition, management has recently announced two manufacturing expansions in Minnesota and West Virginia to strengthen its data center solutions business, including large enclosures for data centers.
Nvidia, and earnings guidance
The refocusing of the business makes sense, as does investing in acquisitions that strengthen the Nvidia collaborator's exposure to data centers and AI spending.
It's a strategy that continues to work in the current environment, and it wouldn't be surprising to see management upgrade full-year guidance for organic growth of 8%-10% and earnings growth of 29%-33% when it reports its third-quarter earnings sometime in late October or early November.
