Stock market investing might seem very exciting from afar, with stories about some of the most outrageous success stories encouraging people to get in on the game. However, investors with a bit of experience know that investments that can make them wealthy overnight are the rarest of rare, and correctly timing trades with such returns is based on luck. Of course, luck has only a part to play in the success stories.
High-growth stocks are available on the TSX, but most companies promising explosive growth also come with a significantly higher degree of capital risk. Fortunately, it is not impossible to find the right stock in the right sector of the economy at the right time. A well-established business supported by strong tailwinds and the ability to execute well can deliver significant growth.
Recent years have seen the rise of Artificial Intelligence (AI) data centres, renewable energy infrastructure, and an overall growth in electrification. As the demand for power infrastructure solutions and electrical equipment rises, businesses providing these solutions benefit.
Today, I will discuss a Canadian industrial stock that is quietly becoming a big winner for investors amid this backdrop.
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Hammond Power Solutions
Hammond Power Solutions Inc. (TSX:HPS.A) might not be a well-known name, but the $4 billion market-cap firm has been making big moves. The company designs and manufactures various types of electrical equipment, power quality, dry-type transformers, and other equipment used across several industries. The renewable energy industry, energy infrastructure, and data centre sectors all rely on its products and services.
As of this writing, Hammond Power Solutions stock trades for $336.69 per share, up by 230.9% in the last 12 months. Such explosive growth in the span of a year is not merely due to market hype. The company enjoys strong financial growth, backed by the growing demand for the solutions it provides.
Never enough data centres
One of the biggest growth drivers for Hammond Power Solutions is the seemingly never-ending demand for AI data centres. As AI adoption grows substantially worldwide, the need for large-scale data centres and reliable infrastructure is following suit.
The first quarter of fiscal 2026 saw HPS.A stock post a 31.5% year-over-year uptick in quarterly sales, which is a new record for the company. The company’s backlog also increased by an astounding 94.6% in the same period, mostly due to data centre-linked projects. A growing backlog does not mean money immediately for the company, but it indicates the visibility of strong future revenue growth.
Foolish takeaway
AI data centre demand might be one of the biggest growth drivers for the stock, but it is just one long-term growth opportunity. Governments and businesses are increasing investments in electrification, improving grids, electric vehicle infrastructure, renewable energy projects, and more.
Hammond Power Solutions will likely see the demand for its solutions increase significantly, as indicated by its impressive backlog. I think there is plenty more growth to capture. Investing at current levels might be a good decision.
