Wabtec (WAB.N): WAB 2Q Preview: Raise ests on solid rail vols.; data center opp gains clarity; see UP-NS/tech-driven sell-off mispricing

Research evidence excerpt

Wabtec (WAB.N): WAB 2Q Preview: Raise ests on solid rail vols.; data center opp gains clarity; see UP-NS/tech-driven sell-off mispricing

Wabtec (WAB.N)

10 July 2026 Citi Research

Key Drivers & Key Debates

Citi is hosting a WAB CFO NDR NYC/CHI, Aug 10th - 12th Request Here

Locomotives potentially as power generators for data centers: The #1 question

we (and likely WAB) have been asked this quarter is on potential sales of drive

systems to data centers. We consider the use of WAB’s locomotives to power data

centers as challenged, at least in the near term, from speaking with WAB and some

of its investors. WAB has been selling heat exchangers to power data centers, but

that is a very small part of its overall revenue. WAB has noted data centers have

approached it about using its engines to power data centers, and WAB is currently

performing ROI analysis to determine if it makes sense to make more investments

in certain of its power systems, especially the mining/marine/drilling drive systems,

to power data centers. Bulls tell us, while shares could benefit from a significant

step-up if the company announces a major opportunity in selling its power

systems to data centers, they see enough opportunity from emerging market

orders on infrastructure investment to drive further upside. Some investors believe

WAB is unlikely to announce a meaningful data center order in 2Q given mgmt.'s

typical consistency and its "limited opportunities" commentary from 1Q earnings,

while other investors note the unprecedented ramp in data center power demand

could surprise to the upside in a WAB announced order in upcoming quarters. We

note companies that manufacture power drive systems continue to explore ways to

power data centers given the unabated demand for power from data centers,