The low-key winner in the AI boom! As the computing power wave brings a huge demand for power distribution, Schneider Electric quietly enjoys the "AI bonus".

Schneider Electric, one of the world's largest electrical equipment manufacturers based in France, confirmed its 2025 performance outlook data after announcing strong revenue growth data for the second quarter on Thursday. The unprecedented expansion and construction of AI data centers worldwide continue to provide significant support for Schneider's performance growth, with this incremental expectation covering all negative effects of Trump's tariff policies. Financial data shows that the company's second-quarter revenue grew by 8.3% compared to the same period last year, reaching 10.01 billion euros (approximately 11.43 billion US dollars) on a comparable basis (organic growth). In comparison, Wall Street analysts had expected revenue of 9.9 billion euros and organic growth of 7.5%, but Schneider's actual performance and growth exceeded expectations. Benefiting from the strong demand brought by the AI craze, the organic revenue growth of its energy management business exceeded 10%, and the organic revenue closely related to AI data centers achieved double-digit growth. The company also confirmed that the implied adjusted EBITA profit margin target for the fiscal year 2025 remains at around 18.7% to 19%, with the midpoint exceeding the Wall Street analysts' general estimate of 18.8%. Schneider management pointed out at the performance meeting that this performance guidance had taken into account the impact of the current or announced Trump government tariff policies. It is worth noting that prior to Schneider's performance release, some analysts had expected the company to withdraw or reduce its performance guidance due to the pressure of tariffs. However, Schneider's management expects the performance growth trajectory to continue under the drive of the global AI craze. Since 2024, the AI craze has been continuously boosting the demand for power resources such as electricity, distribution, and liquid cooling solutions in AI data centers, showing a rapid expansion. When asked about US tariffs, Schneider Electric's Chief Financial Officer, Hilary Maxson, told analysts that the company now expects additional costs to be in the range of "over 100 million to 300 million euros." Maxson added that the company had previously estimated the tariff impact to be "several hundred million euros" in the first quarter and planned to offset it through moderate price increases. "For us, this (Trump tariffs) is not a major disadvantage, and we will certainly take price adjustment measures in the coming quarters to offset it, and the demand for Schneider's power solutions brought by AI is expected to completely cover the negative factors of tariffs," Maxson said at the performance meeting. Maxson also mentioned at the performance meeting that North America is Schneider Electric's largest single market, accounting for approximately 38% of total revenue in the second quarter, and about 83% of the products sold in that region are locally produced. Therefore, the impact of tariffs on the company is much smaller compared to its European counterparts. Benefiting from the global electrification transformation and the continued heavy investment of US tech giants in AI data centers, Schneider stated that the overall demand for data centers continues to surge. In the second quarter, sales closely related to AI data centers achieved rare double-digit performance growth for the company in recent years. The company also mentioned that its cooling product line, including liquid cooling systems (including liquid cooling solutions provided by the recently acquired US company Motivair), has shown good growth in the market. In addition, demand in the non-residential construction sector remains strong, while demand in the residential construction sector, which accounts for an increasingly smaller share, continues to slide due to the sluggish global real estate industry. Schneider Electric - a low-key beneficiary under the AI craze With artificial intelligence applications such as ChatGPT, Claude, and DeepSeek sweeping the globe, the power demand of large-scale AI data centers worldwide is becoming increasingly massive. The exponential growth in power demand for large-scale AI data centers, driven by AI chips and other AI computing infrastructure, is inseparable from the core foundation of electricity supply, forming the basis for the market view that "electricity is at the heart of AI." A forecast report by the International Energy Agency (IEA) predicts that by 2030, global data center electricity demand will more than double, reaching around 945 terawatt-hours (TWh), slightly higher than Japan's current total electricity consumption, and AI applications will be the most important driver of this growth. By 2030, the overall power demand for data centers focusing on artificial intelligence is expected to increase fourfold. Since 2024, AI training/inference clusters have expanded at an unprecedented speed, increasing the power consumption per rack from a mere 10-20 kW in the traditional CPU-dominated cloud computing era to several hundred kW in the present day, with the annual average load of the entire data center expected to more than double during this decade. Power distribution, liquid cooling, and energy digitization have evolved from being "supporting roles" to "necessities." Schneider Electric's long-term focus on medium/low-voltage distribution, UPS, battery storage, HVDC busbars, liquid cooling, and DCIM software is crucial to the core "water, electricity, and coal" of super-large AI data centers such as Meta, Microsoft, Amazon, Google, etc., and is thus scaling up in sync with the expansion of computing power. Schneider Electric's Galaxy series UPS, Lithium-ion BESS, and SM6 gas-insulated switchgear, combined with modular expansion and intelligent distribution, can fully adapt to ultra-high-power AI modular power modules of 30-60 MW; Schneider's EcoStruxure DCIM+ digital twin software ecosystem is designed specifically for the high-power thermal simulation, energy efficiency scheduling, and predictive maintenance of AI. Galaxy UPS, SM6 switchgear, and EcoStruxure DCIM constitute a complete "Schneider power distribution chain" from substation to rack endpoint. Liquid cooling systems, urgently needed by super-large AI data centers, have been a focus area for Schneider in recent years. In 2024, Schneider acquired Motivair to enter the submerged/direct liquid cooling plate and cooling distribution unit (CDU) market; in Q2 of this year, Schneider's pipeline orders were strong, with the company citing "liquid cooling driving double-digit growth" at the performance meeting. The continuous explosion in the scale of AI training/inference clusters has made "power + cooling" the core underlying resource determining the boundaries of computing power. Schneider, with its "end-to-end power system solutions from medium-voltage to rack end + software/hardware digital twin + liquid cooling acquisitions," is positioned at the most direct benefit point in this wave of super AI infrastructure construction. Particularly, the Q2 financial data has already verified its AI-driven growth resilience and profit expansion, and the management remains firm in maintaining a high EBITA profit margin target under the pressure of tariffs. Continuous surging demand for AI computing power Facebook's parent company Meta, Microsoft, Google, ServiceNow, and other tech companies closely associated with the AI trend have revealed strong AI monetization expectations and continuous soaring demand for AI computing power, driving the bullish sentiment in the stock market for AI-related companies. In the financial report announced on Thursday morning, Meta raised its lower limit for full-year capital expenditures in 2025 from $64 billion to $66 billion, and the current estimate for full-year spending is expected to be between $66 billion and $72 billion. The strong growth rate of the advertising business based on the "AI + digital advertising" model is sufficient to support the company's aggressive investments in AI infrastructure. Meta's strong performance and AI investment outlook pushed the stock price up by over 10% after hours. Google's AI business continues to expand massively, with its Gemini generative AI application ecosystem having over 450 million monthly active users. The daily request volume has increased by over 50% compared to the first quarter, and the demand for inference-side computing power at the AI application level continues to surge, processing over 9.8 trillion tokens per month, doubling from 4.8 trillion in May. Google's full-stack layout from the underlying AI infrastructure core based on Google TPU and NVIDIA AI GPU to the top-layer Gemini AI application ecosystem ensures its differentiated advantage in the AI competition. According to Wall Street investment giants Loop Capital and Wedbush, the global AI infrastructure investment wave, centered around AI computing hardware, is far from over and is just beginning. Under the unprecedented "AI computing demand storm," driven by increasing AI computational needs, this investment wave is expected to reach a scale of up to $20 trillion. According to data compiled by Bloomberg Intelligence, Wall Street analysts expect Microsoft, Google, Amazon, and Meta to collectively invest $317 billion in capital expenditures in the current fiscal year - 35% higher than the already strong AI spending in 2024. Analysts on average expect this to increase to $350 billion by 2026.