Legrand's Strategic Position in the Data-Center Infrastructure Boom

The global data-center infrastructure sector is undergoing a seismic transformation, driven by the insatiable demand for artificial intelligence (AI) and cloud computing. As generative AI models and hyperscale cloud services redefine technological capabilities, the need for advanced data-center capacity has surged. According to a McKinsey report on data centers, global demand for data-center power could grow at an annual rate of 19–22% from 2023 to 2030, with 70% of this demand tied to AI-ready facilities by 2030. This structural shift creates a compelling backdrop for companies like Legrand, which is uniquely positioned to capitalize on these long-term tailwinds.

Financial Resilience and Strategic Execution

Legrand's recent performance underscores its ability to outperform in a high-growth, capital-intensive sector. For the first nine months of 2025, the company reported sales growth of +14.5% excluding currency effects, with an adjusted operating margin of 20.7%-a testament to its margin resilience, according to Legrand's first nine months results. This outperformance is driven by its data-center segment, which accounted for nearly 25% of total sales and delivered organic growth of +8.2%. Notably, the company's net profit attributable to the Group reached 12.8% of sales, while free cash flow surged by +16.3%. These metrics highlight Legrand's disciplined cost management and its capacity to convert top-line growth into robust bottom-line results.

Legrand's forward guidance further reinforces confidence. The company has reaffirmed its full-year 2025 targets of +10% to +12% sales growth (excluding currency effects) and an adjusted operating margin of 20.5% to 21.0%, as stated in its results. This optimism is underpinned by seven strategic acquisitions since the start of 2025, adding €500 million in annual sales in markets aligned with the energy and digital transition. By expanding its portfolio of solutions for AI-ready infrastructure, Legrand is not merely reacting to trends but actively shaping them.

Strategic Alignment with Industry Megatrends

The data-center boom is not a fleeting phenomenon but a structural shift. As cloud service providers (CSPs) like Amazon Web Services, Microsoft Azure, and Google Cloud race to meet AI-driven demand, they are partnering with infrastructure specialists to address supply constraints. Legrand's data-center business, which has grown nearly sevenfold since 2018, is now projected to exceed €2 billion in revenue by 2025, according to a Reuters report. This growth is fueled by U.S.-led tech companies investing heavily in facilities equipped to handle AI workloads.

The company's CEO, Benoit Coquart, has emphasized that data centers could account for up to 30% of Legrand's sales by 2025, though residential buildings will remain a core focus. In the U.S.-Legrand's largest market, contributing 39.2% of group revenue-sales rose by 21.6% year-to-date, reflecting the strength of its digital infrastructure offerings, as Reuters noted. This geographic and sectoral diversification mitigates risks while amplifying growth potential.

Navigating Challenges and Seizing Opportunities

Despite its strengths, Legrand operates in a sector marked by significant challenges. Supply constraints, power infrastructure limitations, and labor shortages threaten to slow the deployment of AI-ready data centers. However, the company's expertise in electrical systems and cooling technologies positions it to address these bottlenecks. For instance, as hyperscalers adopt liquid cooling and 48-volt power systems to enhance efficiency, Legrand's product portfolio is well-aligned with these innovations.

Moreover, the company's acquisition strategy is a strategic lever. By integrating smaller, niche players in energy transition and digital infrastructure, Legrand is accelerating its access to cutting-edge solutions. This approach not only strengthens its competitive edge but also ensures it remains at the forefront of a rapidly evolving industry.

A Compelling Investment Case

For investors seeking exposure to the data-center boom, Legrand offers a rare combination of resilience, innovation, and strategic foresight. Its ability to deliver double-digit sales growth, maintain high operating margins, and adapt to technological shifts makes it a standout in a sector characterized by volatility. With global data-center demand set to outpace supply for years to come, Legrand's long-term tailwinds are both robust and enduring.

As the world races to build the infrastructure of the AI era, Legrand is not just a participant-it is a pivotal enabler. For those with a horizon beyond the next quarter, the case for positioning in this industrial titan is clear.