A Grid Infrastructure Play Behind The AI Revolution

While investors focus on chipmakers and AI software companies, some of the biggest opportunities may lie in the infrastructure needed to power them. In this analysis, we look at a recently listed company benefiting from soaring demand for data centres, grid upgrades and cloud computing, and whether its rapid growth can continue.

Forging a way ahead

Forgent Power Solutions FPS US is a stock you probably haven’t heard of, but I am here to change that.

Forgent Power Solutions IPO’d on the NYSE in early February 2026, raising just over $1.50 billion as it did so. However, unlike many new issues, it was listed without a blaze of publicity.

Despite that, the offer was oversubscribed; no doubt that had something to do with the A-list team that brought the company to market. Goldman Sachs, Morgan Stanley and Jefferies co-managed the deal, placing $56.0 million shares at $27.00, the midpoint of the pricing range.

Given that the offer was 15 times over-subscribed, they could have asked for more, both in terms of stock issued and the prIce demanded, but practicality prevailed, and the issue was priced and sized to get it away.

Fast forward 4-months, and we find FPS US trading at $61.68, having only recently printed a new all-time high of $65.66.

Who are Forgent Power Solutions, and what do they do?

Forgent Power Solutions is a leading U.S. based designer and manufacturer of engineered-to-order electrical distribution equipment. The firm has a focus on AI, cloud computing, and grid infrastructure sectors. They build complete powertrain solutions—such as switchgear, transformers, and electrical houses, for large data centres and energy-intensive industrial facilities.

In essence, they are a real-world designer and manufacturer that is benefiting from AI capex and grid investment, and for my money, that makes them interesting.

The business was put together by the San Diego-based PE firm Neos Partners, which merged 4 brands under the Forgent Power Solutions umbrella in August 2025. Neos Partners retains a 45.0% stake in the business.

Other institutional holders include Fidelity, Janus Henderson, Invesco and BlackRock.

The company reported Q3 earnings in mid-May and delivered $379 million of revenues ( +103% ), new bookings/orders of $867.0 Million (+308% YoY ), net income of $24.0 million (+190% YoY), alongside operating cash flow of $29.0 million.

Speaking about those earnings, Gary Niederpruem, Chief Executive Officer of Forgent, was quoted as saying:

“Demand for our products continues to outpace our expectations. Year-over-year growth in both revenues and orders was higher in the third quarter than in the second, despite growing off a larger base. These results reflect the success of our manufacturing expansion, robust demand across our data centre and grid end markets, and our differentiated ability to deliver customised solutions at scale with some of the shortest lead times in the industry.”

Performance

Forgent has performed strongly since it listed, with the stock price gaining almost +140.0% if measured between the day one low and the recent peak. It has posted 15 new highs in that period, versus just six new lows. The stock has looked particularly strong in June, and as we can see, despite the sell-off on Friday, the 5th, they remain substantially higher than even a month ago. In fact, last week’s dip may simply have provided another buying opportunity.

 

Pros:

• Exposure to three Key markets, including the US Grid and data centres
• A growing order book, operating cash flow, and income.
• Forgent holds a genuine niche position in these markets.

Cons:

• PE owners are major shareholders, data centre capex may not be sustainable; if it’s not, then growth rates will suffer.
• It’s a hybridised business that’s not even 1- year old

Technical Outlook

Difficult to fault Forgent Power Solutions from this perspective. There are some potential resistance points above the current levels, around $62.00, $63.16 and $64.06, but these are statistical, rather than anything more substantive. The rally from early April has been supported by the stock’s 10 Day Moving Average, which now sits at $55.67, underneath which, old resistance, at and around $50.00, could also play a role as support if tested.

Fundamental Outlook

Given that Forgent Power has had just 4 months as a quoted company, the fundamental picture is still emerging, but with triple-digit percentage growth in income, order backlog and a +96.0% growth in Adjusted EBITDA, the signs are encouraging. There is still work to be done on margins, but it is possible that data centre contracts could carry higher margins, simply because the companies behind those are time-sensitive rather than cost-conscious. The fact that Forgent’s management was able to raise guidance after the 3rd quarter numbers to reflect what it called the “accelerating demand we are seeing across our business” is another positive sign.