nVent ElectricNVT is currently trading at a higher price-to-earnings (P/E) multiple compared with the Zacks Electronics - Miscellaneous Components industry and the broader Zacks Computer and Technology sector. NVT's forward 12-month P/E ratio sits at 24.65X, higher than the industry's 20.55X and the sector's 20.65X. NVT has a Value Score of D.
NVT stock also trades at a higher P/S multiple compared with other industry peers, including FabrinetFN, OSI Systems OSIS and TE ConnectivityTEL. At present, Fabrinet, OSI Systems and TE Connectivity have P/E multiples of 20.93X, 18.11X and 16.08X, respectively.
NVT Forward 12-Month P/E Ratio
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While this elevated valuation reflects investor confidence in the company's long-term potential, it also raises concerns about whether the stock can justify such lofty multiples. Considering the premium valuation, investors must be wondering whether they should buy, hold or sell the stock.
Strong Data Center Demand Boosts nVent Electric's Prospects
nVent Electric is seeing strong demand from data centers as spending on artificial intelligence (AI) infrastructure continues to rise. NVT expects the infrastructure vertical to post strong double-digit growth in 2026, supported by higher AI-related data center investments. Further, the company expects data center sales to exceed $2 billion in 2026, more than double from 2025 levels.
Growth is coming from liquid cooling, cable management and engineered buildings. NVT is also serving a broad customer base, including hyperscalers, neo-clouds and multi-tenant data centers. The company ended the second quarter with a $2.5 billion backlog, and management sees data center orders remaining strong in the third quarter of 2026.
NVT is also adding capacity to meet rising demand. The company opened its Blaine facility in Minnesota earlier this year, which effectively doubled its liquid-cooling capacity. Further, management said another expansion is needed and announced the Blaine 2 facility, which is expected to open in the first half of 2027. NVT expects liquid cooling to remain a long-term growth area as AI chips generate more heat. Management estimates that liquid cooling currently accounts for only 10-15% of data center cooling, leaving room for further adoption.
The above-mentioned factors show that NVT is well positioned to benefit from strong AI-related demand, healthy orders and new capacity, which could help the company maintain its growth momentum. The Zacks Consensus Estimate for nVent Electric's 2026 and 2027 revenues indicates year-over-year growth of 39.96% and 18.14%, respectively.
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Power Utilities Demand Bodes Well for NVT's Prospects
nVent Electric is seeing strong demand in its power utilities business as electricity needs continue to rise. Power utilities grew double digits in the second quarter of 2026. Management said the growth is being supported by rising electricity demand, an aging grid and higher power requirements from data centers. The company expects power utilities to remain an important part of its infrastructure growth opportunity.
The growing use of AI is adding another source of demand. Due to rising computing needs, AI data centers require more power, which is leading to rising investment in power infrastructure. NVT serves utilities directly as well as through distribution partners. The company sees opportunities in engineered buildings and other infrastructure used around data centers as well. This gives the company an opportunity to benefit from higher power demand beyond its direct data center business.
NVT has been increasing its exposure to infrastructure, with data centers and power utilities as key areas of focus. Infrastructure accounted for nearly 60% of sales in the first half of 2026 compared with 45% in 2025. The company expects to spend about $130 million on capital expenditures in 2026, up 40% year over year. Most of the higher investment is going toward capacity for data centers, power utilities and supply-chain resilience.
The power utilities business could therefore provide NVT with another source of growth as electricity demand increases. Grid modernization and the aging power grid also support the long-term opportunity. Management said it is planning ahead with customers and suppliers to make sure it can support both markets. With double-digit power utility growth already visible and continued investment in infrastructure, the business could become an increasingly important growth driver for NVT.
The above-mentioned factors seem to have instilled investors' confidence in NVT's prospects, as reflected in a rise in share price over the year-to-date period. Year to date, NVT stock has surged 44.5%, outperforming the industry's decline of 19% and the sector's return of 16.8%. The stock also outperformed its industry peers, including Fabrinet, OSI Systems and TE Connectivity. Year to date, Fabrinet, OSI Systems and TE Connectivity shares have plunged 11.7%, 18.2% and 8.6%, respectively.
YTD Price Return Performance
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NVT's Earnings Estimate Revision Shows Upward Trend
The Zacks Consensus Estimate for nVent Electric's 2026 and 2027 earnings per share (EPS) implies year-over-year growth of 53.1% and 24.3%, respectively. EPS estimates for 2026 and 2027 have been revised upward by 10.1% and 9.9%, respectively, over the past 30 days.
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Key Technical Indicator Signals Bullish Trend for NVT
nVent Electric shares are trading above their 200-day moving average, a bullish technical signal that indicates the potential for continued upward momentum in the near term.
NVT 200-Day Simple Moving Average
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Conclusion: Buy nVent Electric Stock Right Now
nVent Electric is seeing steady demand from data centers and power utilities, which is helping drive strong orders and a growing backlog. Further, the company is expanding capacity to support future demand. These factors support the outlook for continued growth. The stock's valuation reflects high growth expectations from the company, which is set to benefit from strong long-term demand from AI-related data center projects.
Currently, nVent Electric sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
