French electrical equipment maker Legrand has again lifted its outlook for 2026, citing stronger-than-expected demand from artificial intelligence data centers. The company now expects sales to grow between 20% and 22% next year, excluding currency swings, its second upgrade this year.
The news came as Legrand reported nine-month sales of €8.33 billion, with organic growth of 12.7% — ahead of what analysts had been expecting. The standout performer was its data-center business, which sells power distribution systems, backup power units, and other electrical gear. CEO Benoît Coquart said that segment now accounts for roughly a third of the company's revenue and grew nearly 40% during the period.
Why AI data centers are driving demand
The boom in artificial intelligence has triggered a massive build-out of data centers around the world. These facilities require enormous amounts of electricity to run servers and keep them cool, and they need sophisticated electrical infrastructure to manage that power safely and reliably.
Legrand is one of the companies supplying that infrastructure. Its products help route electricity from the grid to individual servers, provide backup power in case of outages, and monitor energy use. As tech giants and cloud providers race to expand their AI capabilities, demand for this kind of equipment has surged.
The company's experience mirrors a broader trend. Other firms that supply power and cooling gear to data centers have also seen their outlooks improve. For example, Solstice raised its 2026 outlook as AI data centers and nuclear demand surged, highlighting how the AI boom is rippling through the electrical and energy supply chain.
What this means for investors
For everyday investors, Legrand's upgrade is a signal that the AI-driven demand for physical infrastructure — not just software and chips — remains robust. While much of the AI investment narrative has focused on semiconductor makers and cloud platforms, companies that build the underlying electrical backbone are also benefiting.
Legrand's repeated upgrades suggest that this demand is not just a one-off spike. The company's data-center business has grown rapidly and now represents a significant chunk of its overall sales. That gives investors a clearer picture of where future growth is likely to come from.
However, it's worth noting that Legrand's overall growth is still tied to broader economic conditions. While data centers are booming, other parts of its business — such as residential and commercial building products — can be more sensitive to interest rates and construction activity. The company's 20-22% growth forecast for 2026 assumes that the data-center momentum continues, but also that other markets don't deteriorate sharply.
Investors should also keep an eye on currency movements. Legrand's guidance is based on constant currency, meaning actual reported sales could be higher or lower depending on how the euro and other currencies move. The company's international exposure means exchange rates can have a meaningful impact on its reported results.
Context: A broader pattern of upgrades
Legrand is not alone in raising its outlook. Several companies have recently boosted their forecasts as AI-related demand surprises to the upside. For instance, Novo Nordisk raised its outlook again as its Wegovy pill sales beat forecasts, though that was driven by a different product. And Toyota lifted its annual profit forecast on hybrid demand and a weak yen, showing how currency and product mix can drive upgrades.
But the AI infrastructure theme is particularly powerful. As more companies build out data centers, the demand for electrical equipment, cooling systems, and backup power is likely to remain strong. That could benefit not just Legrand but also other suppliers in the space.
What to watch next
Investors will be watching whether Legrand can maintain its momentum through the rest of the year and into 2026. The company's ability to raise guidance again suggests that order books remain full and that customers are still committing to large-scale data-center projects.
Another key factor is whether the AI build-out continues at its current pace. Any signs of a slowdown in tech spending or a shift in AI investment priorities could affect Legrand's growth trajectory. Conversely, if demand keeps beating expectations, further upgrades could follow.
For now, Legrand's story is a clear example of how the AI revolution is creating winners beyond the obvious tech giants. For investors, it underscores the importance of looking at the entire supply chain — sometimes the most reliable growth comes from companies that provide the nuts and bolts of the digital economy.
