Capital Goods: Weekly Widget: Recent datacenter suppliers' order strength is double edged sword

研报英文原文证据摘录

Capital Goods: Weekly Widget: Recent datacenter suppliers' order strength is double edged sword

IdeaMExhibit 1: Key data center equipment suppliers trailing 12mths orders, and

estimated 1Q26 DC orders (annualized). We compare this to the 'addressable

market size' and conclude the spike in 1Q26 DC Equipment ordering was driven by

some 'early ordering' as we don’t think these players have a combined ~90%

market share. We would expect to see sequential normalization in the coming

quarters. However, this is already well reflected in consensus for European

companies, and even in the case of a DC order normalization, we still see upside

risk on ABB's Electrification orders in 2Q26 and 3Q26 (see exhibit 2).

Large DC Equipment suppliers orders (TTM, and 1Q26 Annualized)

compared to Global DC Equipment TAM (USD mn)

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

-

Vertiv Schneider Eaton Siemens ABB Legrand Total DC Total DC DC

suppliers supplier Equipment

(TTM orders) orders (1Q26 TAM (2026-

Annualized) 27 Average)

Source: Company data, Morgan Stanley estimates, Morgan Stanley Data center model

Backdrop - top down. From a sub-sector perspective, the Data center trade in

Industrials continues to hold up, but we are starting to see some evidence of

broadening in Industrials which we discussed last week (Link to report). In the last

month, we are no longer seeing the straight line outperformance of the AI trade

within Cap Goods. For example, in the last month, the European DC Equipment

suppliers' share prices (Schneider +11%, ABB +7%, Legrand flat) have had average

performance 'only' broadly in-line with the European Industrials index (SXNP), which

is +6% in that time. Interestingly, we have also started to see some of the EU DC-