Data Center Cooling Demand Drives SPX Growth; Geopolitical Risk Lurks
Data Center Cooling Demand Accelerates SPX's HVAC backlog jumped 38% to $755 million, driven by data centers. Management now expects data center sales to grow 70% in 2026, up from 50%, as demand for cooling systems accelerates. This strong demand pushes revenue and profits higher, boosting the stock.
This is the core growth driver behind SPXC's recent gains and raised guidance.
Neptronic Acquisition Expands HVAC Offerings SPX acquired Neptronic for about $430 million, adding HVAC controls and thermal management products for data centers and other markets. This expands SPX's product lineup and sales channels, supporting future growth and earnings.
The acquisition is a new strategic move that broadens SPX's HVAC capabilities and growth potential.
Strong Q2 Results and Raised Guidance SPX reported Q2 revenue up 22.9% to $679 million and raised full-year guidance, citing data center demand and the Neptronic acquisition. Adjusted EPS rose 22.4% to $2.02. The strong results and outlook pushed the stock up 14%.
The earnings beat and guidance raise directly lifted investor confidence and the stock price.
Geopolitical Tensions and Hawkish Fed Pressure Industrials An Iran missile attack on tankers raised oil prices and inflation fears, while the Fed turned hawkish, pushing bond yields higher. SPX shares fell 6.4% as industrial stocks sold off. This risk remains a headwind for the sector.
This event caused a sharp drop in SPXC and highlights ongoing external risks.