Four of Europe’s oldest industrial groups have added more than 150 billion euros to their market capitalization behind rising demand for data centers driven by the artificial intelligence boom.
From switches to smart meters, every European manufacturer offers servers and infrastructure using large language models and power data centers for cloud computing.
“We don’t put $7 billion or $80 billion in the table like Microsoft or Meta,” said Franck Lemery, chief financial officer at Legrand. “(But) the components and our business are growing in relation to it (expenses).”
“The sexy part of AI is led by American companies,” said Alex Cordovil, an analyst at Dell’oro. “But with a few exceptions, the nuts and bolts of the infrastructure are dominated by European players.”
Investors have discovered the possibility. Since the launch of ChatGPT in November 2022, the market valuation of Schneider Electric, Siemens AG, ABB and Legrand, the four major European group in the sector, has increased by 111 billion euros, and has increased by more than 60% in the case of Siemens AG, registered in Germany.
The group continues to provide electricity to residential buildings and industrial groups. However, data centers are the fastest growing revenue stream, not just the amount of computing power that AI models require, and gaming, cloud computing and streaming.
The focus also says the manufacturers have developed it with low processing power, including during this year’s market defeat caused by the launch of China’s large-scale language model Deepseek. According to Cordovil, investors are also concerned about grid systems and power supplies constraints.
However, groups including Legrand have dispelled concerns pointing to a long-term trend of high demand for data processing. Dell’oro expects data center total capital expenditures to rise from nearly $600 million in 2025 to more than $100 million by 2028.
“All turbulence is relative. We are very confident in the promises of our portfolio,” added Lemarie. “We have to live with these ups and downs.”
Schneider Electric
Schneider Electric has been a leading provider of the data center sector since it acquired the $6.1 billion American Power Conversion in 2006, and has been in pole position to benefit from rising electricity demand.
Data centers accounted for around 24% of orders in 2024, up from 23% in 2023 to 19% in 2022.
Although the APC transaction was initially deemed expensive by investors, it allowed the group to move to a market for critical power services, including generators needed to ensure uninterrupted power to the data center.
Schneider is valued at 127.9 billion euros, and last year overtaked France’s major oil total combined totals with signs of a global shift from fossil fuels to electricity.
The company can prevent powerful processing facilities from overheating from software to data center infrastructure, racks, servers and racks for storing cooling systems. Last year, liquid cooling expert Motivair managed 75% interest at $850 million.
This helps to serve customers such as Nvidia. Nvidia’s most powerful AI chip servers require a more efficient water cooling process than air, said Olivier Blum, CEO of the company’s annual meeting.
AI has become “a fundamental change in IT paradigm and the necessary electrical infrastructure,” he added.
Le Grand
Like Schneider and Siemens, Legrand, the French manufacturer of Sockets and Cables, dates back to the 19th century. In the 1900s, they began making light switches from porcelain and wood products, and then the most famous current insulators.
Still based at Limoges’ historic headquarters, Legrand has been pivoted by data centers in recent years, making up for 20% sales in 2024 and doubled in 2019.
“We can show more of the fact that we’re not giving the right target between 20-25% by 2030. We’re sure it’s a vertical that will continue to grow strong over the next few years,” says Lemery.
The group has made 10 small acquisitions over the past year, six of which have been in the data center sector.
But Legrand, like its industry rivals, runs the export model along with many US clients exposed to Trump’s tariffs. This month, CEO Benoît Coquart said US 50-60% tariffs on Chinese products could cost up to $200 million this year.
abb
Swedish-Swiss Electrical Company ABB manufactures everything from robotics to generators, but in recent years its sales have been skewed into data centers.
Morten Wierod, the company’s chief executive, said ABB “works with many of the world’s largest data center operators to ensure safe, reliable, and energy-efficient technologies to manage energy needs.”
In 2024, data center orders accounted for 15% of ABB’s $16.4 billion orders in electrified units, compared to about 9% two years ago. Electrification represents almost half of ABB’s annual revenues of $33 billion. Between 2019 and 2023, data center orders grew at an average annual rate of 24%, accelerating even more over the past year as AI races bolstered.
The provision of ABB for Data Center operators includes ensuring increased availability and energy efficiency, as well as acting like a backup battery for the entire facility. The company says systems that provide reliable power are more environmentally friendly than traditional diesel generators.
However, the company’s exposure to hyperschool has led to stock market fluctuations, including reports that Microsoft has cancelled several lease agreements. The US is the largest market in terms of electrification revenue, at around 50%.
Siemens AG
German conglomerate Siemens focuses on data centers, but it aims to keep up with competitors like Schneider Electric, which has led to an increase in spending on technology infrastructure.
“Siemens and ABB focus on other areas, and are now bringing the ability to withstand the past three years,” said William Mackie, analyst at Kepler Cheuvreux.
The company’s data center-wide business, which has driven the recent growth of its German manufacturer, rose more than 45% to around 1.3 billion euros in the first half of the fiscal year.
However, the Munich-based company has seen several hurdles to this growth and has blamed the suspension of data center orders from one “hyperscalar customer” in order to reduce orders for electrical products such as microgrid controllers by 16%.
