Schneider Electric beats organic growth forecast as AI boom fuels data centre demand

Schneider Electric’s organic revenue growth beat quarterly estimates on Thursday, propelled by surging demand for data centers that power artificial intelligence. (AP Photo/Ted S. Warren)

Schneider Electric’s organic revenue growth beat quarterly estimates on Thursday, propelled by surging demand for data centres that power artificial intelligence, as the French industrial group cements its role as a key supplier for the sector.

Third-quarter revenue grew nine per cent organically to 9.72 billion euros (US$11.7 billion), exceeding the average growth forecast of 8.4 per cent from analysts polled by the company.

Schneider Electric has cushioned the blow of U.S. President Donald Trump’s import tariffs by bolstering its supply chain and making plans to invest more than $700 million in U.S. expansion through 2027, though it raised prices in the process.

Sales in the data centres and network market climbed by a double-digit percentage led by U.S. clients, the company said.

Strong contributions came from China and France too, but grid power availability in other European countries remained an obstacle.

Since it bought U.S.-based data centre cooling firm Motivair in February, Schneider has capitalized on the rapid expansion of data centers, where AI and cloud services require vast amounts of electricity and cooling.

The French group, long known for industrial components like fuses and circuit breakers, builds the backbone of data centres. It supplies power equipment, cooling and server racks that keep AI and cloud services running without interruption.

Chief Financial Officer Hilary Maxson said the data centre sector was growing fast, with the business expected to account for more than 24 per cent of the group’s revenue in the coming year.

While delays continue in Europe, data centre execution is improving particularly in France, Maxson told reporters in a call.

Schneider Electric confirmed its annual forecasts for revenue and profit margin growth, but said it expected both to land in the lower half of the previously announced ranges. Its shares were 2.4 per cent lower as of 0838 GMT.

“We expect momentum to continue into 2026, giving Schneider a mix of secular growth through its large data centre offering as well as further cyclical growth,” said analyst Matthew Donen from Morningstar.

(Reporting by Gianluca Lo Nostro and Jérôme Terroy in Gdansk; Editing by Milla Nissi-Prussak)