The Overlooked Infrastructure Winner#

The Data Center Inflection Point#

While investors fixate on semiconductor manufacturers and cloud computing platforms, ETN (Eaton Corporation) has quietly positioned itself as a structural beneficiary of the artificial intelligence infrastructure build-out. The company's second-derivative advantage lies not in chips or software, but in the power distribution, cooling, and electrical infrastructure that makes hyperscale data centers operational. This positioning becomes apparent when examining the company's Q2 2025 performance, which revealed a record USD 11.4 billion backlog anchored primarily in Electrical Americas—the segment most directly exposed to data center expansion and industrial electrification trends. Yet the company's premium valuation, trading at 31.1x forward earnings, demands a more searching question: can Eaton execute margin recovery, or will rising competition and input costs hollow out the opportunity?