Schneider Electric Raises 2026 Targets Again on Data Centre Boom

Schneider Electric raised its 2026 targets for the second time this year on Friday, October 16, as orders from cloud companies building AI data centres kept growing. The French industrial group said adjusted core profit will grow 18 to 21 percent organically in 2026, up from its earlier range of 14 to 19 percent. It put organic revenue growth at 12 to 14 percent, up from 10 to 13 percent.

Third quarter revenue rose 16.9 percent organically to 11.46 billion euros, or 12.87 billion dollars. That beat the 11.13 billion euros analysts expected in a company provided consensus. Finance chief Nathan Fast called it the strongest quarter in the company's history on a press call.

Data centres did the heavy lifting

Chief executive Olivier Blum said data centres stayed a key growth driver, with demand growth in triple digits in the quarter and a record order backlog at the end of the period. Schneider sells the power and cooling backbone of a data centre: switchgear, power distribution, cooling units, server racks and the software that runs them. US hyperscalers kept ordering, the company said, while third quarter growth was led by China and East Asia.

The segment numbers show the split. Energy Management, the larger business, brought in 9.62 billion euros in the third quarter and grew 18.8 percent organically. Industrial Automation brought in 1.85 billion euros and grew 8.1 percent. China and East Asia grew 26.1 percent. North America, which accounts for about 40 percent of revenue, grew 19.9 percent.

Why it matters

Schneider has become a plain test of whether the AI buildout is real spending or a story. Its order book is filled by data centres that need power gear years before the servers switch on. A second target raise in one year, on a record quarter, says the buildout is still speeding up, at least for the firms that sell the electrical kit.

The timing matters too. This week, investors sold AI linked stocks hard over worries about the debt that funds data centre projects, with cloud firm CoreWeave at the centre of the selloff. Schneider's numbers cut the other way: demand from the same buildout, paid for in orders, not projections.

What to watch

Management said pricing is offsetting raw material inflation and tariffs. The drag is currency. Schneider expects exchange rates to cut 2026 revenue by 300 million to 400 million euros. The raised targets now set a high bar for the fourth quarter, and the stock slipped in early trade on Friday despite the raise, after a strong run this year. The full year result will show whether data centre orders convert into cash at the pace the new targets promise.