Rising bond yields, a more hawkish Fed tone and a lack of clear guidance from Chair Warsh have put rate risk back at centre stage, yet US data center investment keeps pushing ahead. That mix of pressure and resilience creates a fresh test for stocks tied to the power and infrastructure behind digital growth. This article walks through three US data center infrastructure stocks exposed to this story and how each could be positioned.
The stocks covered below are just a starting sample, since the full U.S. Data-Center Infrastructure & Power Enablers screen surfaced 22 more companies with equally compelling stories that are not included here.
To go deeper into this theme, identify your preferred balance of quality and risk and analyze which stocks line up best with your thesis, head straight into the U.S. Data-Center Infrastructure & Power Enablers screener.
TTM Technologies (TTMI)
Overview: TTM Technologies is a US based manufacturer of advanced printed circuit boards, RF components and mission systems that sit inside high performance electronics, including networking and power control hardware used in modern data centers. Its products also support aerospace and defense, automotive, medical and industrial customers that need complex, reliable electronic systems.
Operations: TTM Technologies generates about US$2.0b in Commercial revenue and US$1.4b from Aerospace & Defense, with total sales of roughly US$3.4b spread mainly across the United States at US$1.7b and other international markets at about US$1.4b.
Market Cap: US$12.5b
Investors looking at the data center buildout theme may find TTM Technologies interesting because it supplies the advanced PCBs and RF assemblies that sit inside networking and power control equipment for AI heavy facilities, while also serving higher margin aerospace and defense programs. The company is ramping new capacity in places like Syracuse and Penang, supported by credit facilities and acquisitions that expand both data center and defense exposure. However, this comes with higher capital intensity and reliance on external borrowing. Customer concentration in hyperscalers and chip companies, plus geopolitical and cost pressures around its global footprint, add meaningful risk. The way TTM executes on these expansions, and how the balance between data center demand and defense programs evolves, may be at least as significant for investors as recent swings in bond yields.
TTM Technologies is ramping up capacity while relying more on borrowing and a concentrated customer base. Before assuming the data center story outweighs those trade offs, review the 3 key rewards and 2 important warning signs and see what might be hiding in plain sight.
ERock (EROC)
Overview: ERock provides modular, natural gas based distributed power systems that give data centers and other commercial or industrial sites their own on site and backup electricity, helping customers secure faster and more reliable power than they might obtain through congested grid connections.
Operations: ERock generates about US$162 million in revenue from Electric Equipment in the United States.
Market Cap: US$3.4b
ERock is worth a closer look if you are focused on the build out of data center power. The company supplies modular gas fired units that can be deployed faster than traditional grid upgrades, and recent contracts with hyperscale clients such as Anthropic show how that model is being used in real AI focused projects. Rising grid constraints and long interconnection queues are pushing utilities and large data center operators to seek quicker speed to power, which is where ERock’s backlog and conversations with utilities come into play. However, the business is still loss making, relies heavily on external borrowing and has a relatively new leadership team, so the upside that analysts are modeling sits alongside real execution and funding risk that investors should weigh carefully.
ERock’s accelerating role in data center power could be masking a very different story on funding and execution risk. Get the full context in the 4 key rewards and 1 important major warning sign
Power Solutions International (PSIX)
Overview: Power Solutions International designs and manufactures large engine based power systems that provide backup and prime electricity for heavy users such as data centers, industrial sites and transportation fleets. It gives operators tailored power packages that combine engines, controls, cooling and enclosures into one solution.
Operations: Power Solutions International generates about US$676 million from Engineered Integrated Electrical Power Generation Systems, with most revenue coming from the United States alongside smaller contributions from the Pacific Rim, Europe and the rest of North America.
Market Cap: US$837 million
Power Solutions International may appeal to investors seeking direct exposure to the power backbone that keeps data centers running when the grid is tight or goes dark. The company is tightly focused on engineered power generation systems. Management has repeatedly highlighted strong demand for its data center power solutions, even as it works through production ramp up costs and mixed end market demand. At the same time, past accounting driven boosts to profit and working capital strain show that reported earnings have not always translated cleanly into cash. With the Fed signaling tighter financial conditions and borrowing costs higher, that gap between profit and cash, plus reliance on external funding, could be important. A key consideration is whether current demand and operational changes will affect that dynamic.
Power Solutions International’s data center power story is accelerating, yet the real hinge may be what the numbers say about funding, cash conversion and contract quality. Weigh that full picture in the 4 key rewards and 2 important warning signs
Seeking Fresh Alternatives Beyond Data Centers
Fresh breakout stories and quiet momentum often get caught early, then move fast while it matters and before the crowd catches on. Scan these under the radar ideas and act now.
- Spot potential trend shifts as capital rotates and track companies in the 45 high quality undervalued stocks while they are still flying below most investors’ filters.
- Target resilient cash generators with staying power by reviewing the 12 dividend fortresses before yields drop and prices move away from today’s entry range.
- Get ahead of the build out in electrification and grid upgrades by scanning the 38 power grid technology and infrastructure stocks while many of these stories remain under the radar for now.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com