DNOW and Data Centers: A New Tailwind for PVF and Pumps
DNOW Inc. DNOW is witnessing a newer adjacency in data centers as power and gas infrastructure expands. The early activity is still small relative to the company’s energy infrastructure base, but it is a tangible foothold that can add incremental demand as power and gas networks expand.
The opportunity amid the company’s ongoing operational issues. Capturing project-driven wins requires clean execution, and DNOWDNOW-- is still working through enterprise resource planning disruption that has weighed on results and visibility.
DNOW’s Data Center Entry Point and Why It Matters
DNOW began supplying pumps and pipe, valves, and fittings to 11 new data center customers across four major U.S. markets in 2025. Management also expects to expand into additional markets in 2026.
That proof point matters because it positions DNOW as more than a traditional energy distributor. Data centers sit adjacent to DNOW’s core infrastructure lanes, and this customer set can become another source of recurring project and service demand alongside midstream and utility work.
Linking Data Centers to Gas and Power Buildout
The data center theme is tied to the buildout of power and natural gas infrastructure. As capacity ramps, facilities require expanded networks that can increase demand for products DNOW already distributes, including PVF and pumps.
In that framing, data centers are not a replacement for DNOW’s energy exposure. They are an incremental driver that can complement midstream and gas utility activity and broaden the demand mix away from reliance on upstream cycles.
DNOW’s Cross-Sell Engine After the MRC Deal
DNOW’s ability to convert the data center adjacency into meaningful share gains depends on what the MRC Global integration unlocks. The combined platform expands scale and product breadth, improving DNOW’s ability to support project-driven customers with a wider catalog and footprint.
The addition of MRC Global’s in-house valve automation is intended to cut lead times, which can matter when customers are coordinating multiple contractors and equipment deliveries. Also, combined procurement is expected to improve sourcing leverage, supporting competitiveness as systems stabilize.
Those integration benefits are also tied to DNOW’s broader revenue synergy plan. Management expects cross-selling through Process Solutions and broader valve automation capabilities to add operating leverage once workflows normalize.
DNOW’s International Adjacency via Natron Singapore
The data center angle is not limited to the United States. Management noted that the Natron (in Singapore) acquisition expands DNOW’s exposure to electrical and data center-related opportunities internationally.
That complements the existing International segment footprint and adds another pathway to participate in infrastructure-led demand outside DNOW’s traditional North American energy lanes.
DNOW’s Execution Risks in a Transition Year
The primary execution risk remains operational disruption tied to enterprise resource planning implementation within MRC Global U.S. operations. Those challenges weighed on third and fourth-quarter 2025 performance, and management has not provided a timeline for resolution. Revenue and earnings guidance remain suspended.
The operational impacts described include slower processing, elevated safety stock, order bottlenecks and service effects, with disruption concentrated in upstream and downstream operations. DNOW has taken mitigation steps, including adding more than 200 field personnel and establishing a dedicated help desk.
For the data center theme, these frictions matter in a practical way. Project customers tend to demand reliable fulfillment and predictable lead times. If workflows remain constrained, DNOW risks lower win rates and lost wallet share, and the company may have a harder time scaling data-center-related orders even when demand is present.
What Would Confirm the Trend in 2026
The first confirmation item is straightforward: expansion to additional U.S. markets in 2026, building beyond the initial four-market footprint established in 2025.
Second, investors should look for evidence that enterprise resource planning friction is subsiding as legacy MRC workflows shift onto DNOW systems. That shift is central to restoring process speed, reducing bottlenecks, and supporting consistent service levels.
Investors should also watch whether margin recovery begins to emerge in the second half of 2026, consistent with management’s expectation that incremental synergies translate into improved profitability as operational issues fade.
DNOW’s Bottom Line for Investors Watching the Theme
Data centers are an incremental tailwind that can improve DNOW’s resilience by adding infrastructure-driven demand alongside midstream and gas utility activity. The early customer wins in 2025 establish a credible entry point, and the planned 2026 market expansion is the next visible step.
Near-term risk remains elevated. Margin pressure, working-capital intensity, and suspended guidance keep the setup dependent on enterprise resource planning stabilization and execution follow-through. If operations normalize, the data center adjacency can become another lane for PVF and pump demand. If disruption persists, the opportunity may take longer to show up in results.
For investors benchmarking the space, the peer list was highlighted alongside DNOW. This includes Crane Company CR and Graco Inc. GGG, among others, which can be useful reference points when thinking about relative positioning across industrial distribution and equipment demand cycles.
DNOW carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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