Every new data centre has an electricity problem to solve. Thousands of servers could consume enormous amounts of power, and all of that electricity has to be transformed, distributed, and managed reliably before a single artificial intelligence (AI) model or cloud application can run.
This trend is opening new opportunities in overlooked areas of the data centre supply chain beyond semiconductors. One Canadian manufacturer, Hammond Power Solutions (TSX:HPS.A), is already seeing the effect of that demand in its order book and financial results.
In this article, I’ll explain how this Canadian company could profit from the data centre boom by supplying the critical power equipment these facilities cannot operate without.
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Hammond Power Solutions stock
Based in Guelph, Hammond Power Solutions manufactures dry-type transformers, power quality equipment, magnetics, and power conversion systems that support electrical distribution networks. Its products serve several industries, including AI data centres, mining, oil and gas, commercial construction, and wind power generation.
As of August 12, Hammond stock closed at $262.70 per share, giving the company a market cap of $2.4 billion. Despite recent volatility, the shares have soared around 100% over the last year and 65% year-to-date. However, HPS.A stock has pulled back 22% in three months and now trades 28.1% below its 52-week high. At the current level, the stock also offers a modest 0.4% annualized dividend yield.
Despite this recent weakness, the great part about Hammond’s long-term outlook is its rapidly expanding business as data centre investment drives stronger product demand.
Data centre demand is powering growth
The connection to Hammond’s growth was clear in its recently released second-quarter results, when rising AI data centre shipments helped it deliver record sales.
The company’s second-quarter sales surged 44.7% year-over-year (YoY) to a record $324.8 million. Its U.S. and Mexico sales jumped 73% YoY to $272.7 million, driven largely by higher data centre shipments, improving industrial demand, and better price realization. On the flip side, its Canadian sales fell 23.7% YoY to $44.7 million, partly due to the timing of large custom projects and softer market conditions.
On the brighter side, Hammond’s gross margin improved to 31.5% last quarter from 30.7% a year ago. Previous pricing actions, a higher custom product mix, operational improvements, and better operating leverage from its new Mexican facility supported better profitability.
The Canadian manufacturer’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 59.4% YoY to $53.2 million. Also, its adjusted earnings jumped to $2.76 from $1.72 per share.
Why the data centre opportunity could get bigger
For investors trying to profit from the data centre boom, Hammond’s huge order backlog makes its growth outlook even more appealing. The company’s second-quarter backlog was 96.9% higher than a year ago, primarily because of large project orders driven by AI data centre activity. Although its shipments exceeded new order bookings during the quarter, the backlog remained at significant levels. This should help Hammond keep its expanded manufacturing capacity busy while improving lead times and responsiveness to customers.
Along with that, its expanded manufacturing footprint is helping the business serve growing U.S. demand more effectively. Hammond’s new Mexican facility is already improving operating leverage. In June 2026, the company also completed the acquisition of AEG Power Solutions. Since the transaction closed near the end of the quarter, no AEG revenue or operating costs were included in the second-quarter results.
Put it all together and Hammond has a clear way to benefit from rising investment in AI data centre power infrastructure, making it an attractive Canadian growth stock to consider after its recent pullback.
