nVent Electric Surges 49% YTD: Should You Still Buy the Stock?

nVent Electric NVT shares have surged 49.3% year to date, outperforming the Zacks Electronics - Miscellaneous Components industry’s decline of 5.7%. The stock also outperformed its industry peers, including OSI Systems OSIS, Fabrinet FN and TE Connectivity TEL. Year to date, shares of Fabrinet have gained 10.5%, while TE Connectivity and OSI Systems shares have plunged 13.2% and 13.1%, respectively.The outperformance of nVent Electric’s shares raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.YTD Price Return PerformanceImage Source: Zacks Investment ResearchData Center Demand Boosts NVT's ProspectsnVent Electric is benefiting from strong demand for data center infrastructure, which is becoming a major driver of its revenue growth. In the first quarter of 2026, the company reported organic sales growth of 34%, with infrastructure sales rising nearly 80% year over year. Management said data centers were the biggest contributor to growth, helping the company deliver record sales, orders and backlog.The company is seeing demand across both gray-space and white-space data center applications. In the gray space, growth was driven by engineered buildings, enclosures and power connections. In the white space, liquid cooling, power distribution units and cable management solutions performed well. Management noted that growth was broad-based across the portfolio and supported by demand from hyperscalers, neocloud providers, multitenant operators and distribution partners.nVent Electric's order trends also remain strong. Organic orders increased about 40% in the first quarter, largely driven by AI data center projects. Backlog reached a record $2.6 billion, rising in the low double digits sequentially. The company stated that most of its backlog extends beyond 12 months and into 2027, providing visibility into future revenues. Further, in the first quarter, new products added more than 20 percentage points to sales growth, with many of those products tied to data center applications.To support demand, nVent Electric is increasing capacity across its operations, which should help the company generate more revenue once fully ramped up. The company recently opened its new Blaine, MN, facility and expects production to ramp through 2026. It is also investing in additional capacity for liquid cooling and other data center products.Overall, the above-mentioned factors show that data center demand is likely to remain an important revenue growth driver for the company. The Zacks Consensus Estimate for nVent Electric’s 2026 revenues is pegged at $4.98 billion, indicating a year-over-year increase of 27.97%.Image Source: Zacks Investment ResearchnVent Electric Benefits From Strength in Power UtilitiesnVent Electric is benefiting from growing investments in power utility infrastructure. In the first quarter of 2026, nVent Electric’s power utility business posted double-digit sales growth, and the company now sees power utility become its second-largest growth opportunity after data centers. NVT's prospects are set to benefit as power utility customers continue to increase their investment to expand grid capacity as electricity demand continues to rise.Rising power demand from AI data centers is creating an additional need for transmission and distribution infrastructure. Utility customers are upgrading and expanding their networks to support higher electricity loads. This is driving the demand for nVent’s electrical protection and connection products, such as enclosures, power distribution products and related electrical equipment, which bodes well for the company’s prospects in the upcoming quarters.nVent Electric is investing significantly to support this demand. NVT plans to spend approximately $130 million on capital expenditures in 2026, which is a 40% increase from the prior year. The company said a significant portion of this investment is being directed toward capacity expansion for power utility and data center projects. nVent Electric is also expanding its engineered building solutions business, which serves utility customers.The EPG acquisition is helping nVent Electric increase its exposure to utility projects. Management stated EPG continues to perform above expectations and is providing additional opportunities in engineered buildings and electrical integration solutions. With double-digit utility sales growth, increased capacity investments and continued utility spending on grid expansion, power utilities are becoming a major contributor to nVent's revenue growth.Key Technical Indicator Signals Bullish Trend for NVTnVent Electric shares are trading above their 200-day moving average, a bullish technical signal that indicates the potential for continued upward momentum in the near term.NVT 200-Day Simple Moving AverageImage Source: Zacks Investment ResearchNVT’s Valuation Reflects High Growth ExpectationsnVent Electric is currently trading at a higher price-to-sales (P/S) multiple compared with the industry. NVT’s forward 12-month P/S ratio sits at 4.85X, higher than the industry’s forward 12-month P/S ratio of 4.36X.NVT Forward 12-Month P/S RatioImage Source: Zacks Investment ResearchNVT stock also trades at a higher P/S multiple compared with other industry peers, including OSI Systems, Fabrinet and TE Connectivity. At present, OSI Systems, Fabrinet and TE Connectivity have P/S multiples of 1.94X, 4.26X and 2.83X, respectively.NVT’s rally reflects investor excitement about AI-related data center demand, putting it above industry and peers in terms of valuation, reflecting the high growth expectations of the company in the long term.Conclusion: Buy nVent Electric Stock Right NownVent Electric is seeing steady demand from data centers and power utilities, which is helping drive strong orders and a growing backlog. Further, the company is expanding capacity to support future demand. These factors support the outlook for continued growth. The stock’s valuation reflects high growth expectations from the company, which is set to benefit from strong long-term demand from AI-related data center projects.Currently, nVent Electric sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks