I’m starting to think $ETN could become a more significant competitor to $VRT than I’ve given it credit for. Reading Eaton’s November 3 call alongside Peter de Bock’s EEPower interview brought that into focus, particularly the ambition to sell complete power and cooling systems. I own both, and Eaton is giving me more reasons to like the position. Data center revenue grew approximately 65% year over year, with orders more than doubling on a rolling 12-month basis. Electrical backlog exceeded $20 billion, even as shipments accelerated. Boyd is where my thinking has changed most. Eaton paid around $9.5 billion for it, and the performance is making that price easier to understand. Sales grew 24% sequentially, backlog nearly tripled year over year, and management discussed at least $2.7 billion in revenue for 2027 against an updated $1.9 billion outlook for 2026. I’m particularly interested in what Eaton can do with Boyd through its existing customer relationships. Eaton already supplies the electrical infrastructure for many of these projects. Adding cooling gives it a larger potential order and a reason to get involved earlier in the design. I suspect that combination will become increasingly valuable as customers try to get facilities operational faster. De Bock’s interview takes that ambition further. He describes complete modules integrating power and cooling, backed by Eaton’s manufacturing scale. That sounds like a company moving further into the territory where we’ve liked Vertiv. The manufacturing side is already showing up in Eaton’s results. Electrical Americas margins improved to 29.8% from 27.5% in Q2, with 18 of 25 expansion projects completed. After spending to build that capacity, Eaton is starting to get more earnings out of it. Cash flow guidance stayed unchanged despite the earnings upgrade, so cash conversion is something I’ll be watching over the next few quarters. On 800 VDC, the call gave us more concrete progress. Management said its 2 MW solid-state transformer passed all UL tests in October, with ten pilots running and volumes expected to build next year. I like that Eaton can participate in the transition while continuing to supply customers building with existing AC systems. For Vertiv, I remain positive. Eaton’s orders and Boyd’s growth are encouraging evidence of the spending going into power and liquid cooling. Vertiv has been preparing for this transition too, and I still like the service opportunity attached to its growing installed base. But Eaton is becoming a competitor I would take more seriously on larger contracts. It has the electrical relationships, manufacturing capacity and now a rapidly growing cooling business. I can see that putting pressure on pricing as the two companies compete for more of the same work. There’s also something worth digging into around revenue per MW. Centralized DC systems can remove conversion stages and consolidate equipment. I want to understand how much profit Eaton and Vertiv can earn from those replacement systems, especially if customers start buying more of the infrastructure as one package. I come away more confident in Eaton heading into 2027. Boyd is growing faster than I expected, and the existing electrical business is converting new capacity into earnings. For Vertiv, I’ll be paying closer attention to margins on the larger integrated projects. Eaton increasingly looks capable of making those contracts harder to win.
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