The artificial intelligence (AI) boom isn’t just making chipmakers rich. It’s also fueling one of the biggest infrastructure spending waves the world has ever seen. According to market research firm Dell’Oro Group, global data centre capital expenditures are now expected to top US$1 trillion in 2026 as hyperscale AI deployments and cloud infrastructure investments continue to accelerate.
That’s why investors may want to look beyond AI-focused tech stocks. Industrial companies providing the critical equipment needed to build and power data centres could also benefit, and Hammond Power Solutions (TSX: HPS.A) is one of them. This transformer manufacturer is already benefiting from surging demand for electrical infrastructure, and its latest results suggest the growth runway may still be getting longer.
In this article, I’ll highlight why this Canadian stock could soar as the trillion-dollar data centre buildout continues.
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Powering a major growth trend
If you don’t know it already, Hammond Power Solutions makes dry-type transformers and related electrical equipment used across industrial, commercial, and infrastructure projects. That product lineup puts it in a sweet spot because data centres need dependable power management equipment to operate safely and efficiently.
Its stock has surged about 162% over the last year, showing how much investor confidence has improved as demand for its products keeps building. As a result, it now trades close to $334 per share, giving the company a market cap of about $3 billion. It also pays a quarterly dividend, though its current yield of about 0.3% is clearly a bonus rather than the main reason to own the stock.
Financial strength is driving the rally
The ongoing growth trend in Hammond’s financials clearly shows why investors are excited. The company generated record sales of $265 million in the first quarter of 2026, up 31.5% from a year ago. Its gross margin also improved to 30.1% with the help of pricing strength and better factory overhead absorption.
On the profitability side, the company posted adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $41 million, equal to 15.5% of sales, while its adjusted earnings rose 29.7% year-over-year (YoY) to $2.08 per share. Those solid numbers suggest that the company is not just riding a temporary spike in orders.
Record demand is feeding the backlog
In the latest quarter, Hammond Power’s backlog jumped 94.6% YoY. A large part of that increase came from data centre-related demand, giving the company a healthy stream of work that could keep revenue elevated in the quarters ahead.
Its new factory in Mexico also started shipping during the first quarter. That should support higher production volumes and help the company serve customers more efficiently as order activity remains strong in the United States and Mexico.
A bigger platform for future growth
Beyond these positive factors, Hammond recently agreed to acquire AEG Power Solutions for about $365 million, a move that should expand the business beyond its core transformer operations. The deal adds more reach in power quality and power conversion, which could make Hammond even more useful to customers building modern electrical systems.
The company is also rolling out its Integrated Electrical Solutions unit. By bringing together capabilities in magnetics, power quality, conversion, controls, critical power, and service, Hammond can offer broader system-level support instead of selling only stand-alone components.
That matters because the data centre opportunity is not likely to be a one-quarter story. Operators want trusted suppliers that could support performance, reliability, and uptime across larger and more sophisticated projects.
Given these positive factors, I wouldn’t be surprised if Hammond stock continues to soar in the years to come and helps investors benefit from one of the biggest infrastructure investment cycles in recent history.
