When the Toronto Stock Exchange revealed its 2026 TSX30 ranking of top three-year growth performers on September 9, industrial heavyweight Hammond Power Solutions (TSX: HPS.A) stock secured a prime spot — at number 13 out of 30. Driven by an insatiable global appetite for power infrastructure that necessitated investments in additional factory capacity, Hammond Power’s revenue surge propelled the stock to an impressive 625% capital gain over the three-year measurement window to June 30, 2026.
The Canadian growth stock’s strong capital gains was enough to turn a $1,000 investment into $7,250 in just 36 months!
Source: Getty Images
What propelled Hammond Power Solutions stock?
What transformed a traditional industrial manufacturer into a market-topping growth engine? The answer lies at the intersection of artificial intelligence (AI) data centres, electrical grid modernization, and global industrial electrification.
Hammond Power Solutions wasn’t a speculative tech startup when it began to soar. The business traces back to a century-old 1917 manufacturing stalwart. It produces dry-type power transformers, power quality products, and custom magnetics.
As tech giants rush to construct high-density AI server farms, standard power setups no longer cut it. Modern AI racks require custom transformers to handle massive electrical loads safely and efficiently. Data centre sales exceeded 30% of Hammond Power’s total revenue by the second quarter of 2026 (Q2 2026).
In Q2 2026, revenue surged 44.7% year over year to $324.8 million, led by a 73% increase in U.S. and Mexico shipments. Operating leverage kicked in cleanly: adjusted earnings per share (EPS) rose 60.5% to $2.76. Meanwhile, Hammond Power Solutions’s order backlog sits nearly 97% higher than a year ago, providing investors and management with multi-year revenue, earnings and cash flow visibility.
Can HPS.A stock keep rising?
Hammond Power stock has recently experienced a temporary correction as the market digests recent strategic moves, including capital investments, and acquisitions activity. Canadian sales, down 11.1% during the first half of 2026, softened as the local market experiences a general softness and increasing price competition.
The growing business is actively building out its global manufacturing footprint to stay ahead of structural demand. Gross margins have marginally expanded over the past 12 months as Hammond raised prices while growing demand enabled higher factory utilization.
Hammond closed a $365 million transformational acquisition of AEG Power Solutions in June, broadening its footprint across Europe and Asia while expanding its power electronics portfolio.
Hammond’s total addressable market (TAM) continues to expand as electrification demands extend beyond cloud computing into renewable energy integration and electric vehicle (EV) grid upgrades. Acquisitions expand this TAM, and they could be accretive — if integrated well.
Should you buy the dip?
Following a 22% pull-back from its all-time highs, HPS.A stock trades at a forward P/E of 29. Shares trade at a premium compared to legacy industrial peers, it remains reasonable given its potential to grow revenue at a 40% over the next two years. Earnings could surge as well.
However, growth oriented investors should keep a few downside risks in mind: input cost variability, capital expenditure cyclicality, and integration risks following a recent significant acquisition.
Price fluctuations in raw materials like copper and electrical steel can compress gross margins if price adjustments lag inflation. Any temporary pause or digestion phase in hyperscaler AI capex spending could decelerate short-term order momentum, and successfully integrating AEG Power Solutions across international markets will require disciplined operational execution.
Investor takeaway
Hammond Power Solutions stock continues to sit at the center of the grid modernization, the global energy transition and the AI hardware arms race. But I wouldn’t expect another 600% surge over the next three years as the law of large numbers creeps in to drag performance. That said, HPS.A stock remains a promising core holding for growth investors looking for tangible, real-economy exposure to the AI infrastructure boom.
