**Schneider Electric** raised its 2026 revenue and profit targets for the second time this year after posting record third-quarter revenue of €11.46 billion (approximately $12.9 billion), fueled by surging demand for AI data centers.
Key points
Third-quarter revenue rose 16.9% on an organic basis, significantly exceeding market expectations.
Demand for data center equipment posted triple-digit growth during the quarter.
The stock fell instead, weighed down by the planned acquisition of software company PTC for approximately $22.6 billion.
Schneider Electric’s Third-Quarter Results
French power and electrical equipment maker Schneider Electric said last Friday that third-quarter revenue rose 16.9% on an organic basis. The figure was a quarterly record and far exceeded analysts’ expectations of about 13.8%. Revenue at its Energy Management division, which supplies power and cooling equipment for data centers, increased 18.8% organically to €9.62 billion.
CEO Olivier Blum said demand from data centers was growing at a triple-digit rate, adding that this was “also improving visibility on performance in 2027 and 2028.” By region, China and East Asia led with growth of 26.1%, while North America, which accounts for 40% of total revenue, was up 19.9%.
The company has now raised its forecast for organic growth in adjusted EBITA, its key profit metric for the year, to 18–21% from 14–19%. It also lifted its organic revenue growth forecast to 12–14% from 10–13%.
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JPMorgan questions PTC acquisition
The results show that AI investment is spreading beyond chipmakers into the infrastructure that underpins them. Once known as a “circuit-breaker company,” Schneider has emerged as a key supplier building out the electrical infrastructure of AI data centers, from cooling systems and server racks to power distribution equipment. The stock reaction, however, was cool.
Schneider shares gave up their early gains and closed down about 1.6%. Plans to acquire software company PTC weighed on the stock. On October 5, Schneider agreed to pay $205 per PTC share in cash, valuing PTC’s equity at about $22.6 billion. PTC shares plunged nearly 10% on the day the deal was announced.
The following day, JPMorgan analyst Phil Buller downgraded Schneider to “Neutral” from “Overweight” and cut his price target to €310 from €345. He questioned the strategy of committing about $27 billion to the relatively less attractive industrial automation business. JPMorgan, however, described this week’s share-price pullback as an “overreaction.”
Another target increase in July
This is the second time Schneider has raised its targets, following the previous increase on July 30. At the time, after first-half revenue hit a record €21.2 billion, Schneider raised its full-year organic revenue growth target to 10–13% and its core profit growth target to 14–19%.
Buller was optimistic then, too. He pointed to broad-based growth across all business segments and triple-digit growth momentum in the data center business as positives.
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