Advanced Energy Industries reported strong momentum in data center power solutions and projected a rebound in semiconductor equipment spending starting in 2026, signaling renewed growth for the industrial technology sector.
- Data center segment revenue rose to 35% of total sales, up from 22% YoY
- $120 million in new data center contracts secured in Q4 2025
- Projected 25% YoY increase in semiconductor capex starting in 2026
- R&D investment maintained at $75 million per year
- Stock surged 8.3% in after-hours trading post-conference
Advanced Energy Industries announced expanded revenue contributions from data center infrastructure projects during its presentation at the Needham Conference, citing a 40% year-over-year increase in orders tied to AI-driven computing facilities. The company highlighted that data center-related segment sales now account for over 35% of total revenue, up from 22% in the prior fiscal year. The company’s leadership emphasized that sustained investment in AI and cloud infrastructure is driving demand for high-efficiency power conversion systems, particularly in North America and Western Europe. Advanced Energy noted ongoing deployments with major hyperscalers, including a $120 million contract signed in late 2025 for modular power units designed for next-generation data centers. Looking ahead, executives forecast an inflection point in semiconductor capital expenditure, projecting a 25% YoY recovery in equipment demand beginning in early 2026. This outlook is based on rising inventory normalization among foundries and improving end-market conditions for automotive and industrial electronics. Market analysts observed that Advanced Energy’s forward guidance has strengthened investor confidence, pushing the stock up 8.3% in after-hours trading following the conference. The rally reflects broader optimism about cyclical recovery in the semiconductor supply chain, potentially benefiting suppliers across the ecosystem. The company reiterated its commitment to R&D, allocating $75 million annually to develop next-generation solid-state power modules and digital control systems targeted at both data center and industrial applications.