Data Centers Are Running Out of Transformers. Here's the Industrial Stock With a 3-Year Backlog.

Eaton (ETN) posted record second-quarter sales of $8.5 billion, up 21% year over year, with data center revenue surging 65%. The numbers put the company at the center of the AI infrastructure buildout, where power transformers have emerged as a critical bottleneck.

The demand picture is stark. The article describes unprecedented orders and multi-year backlogs at major manufacturers, with Eaton's running about three years. For a company with $8.5 billion in quarterly sales, a backlog that long suggests deep revenue visibility. That is interpretation, not a reported guidance figure.

Portfolio reshaping is the second catalyst. Eaton is separating its Mobility division and combining it with Dana Incorporated (DAN), a move aimed at concentrating the company on higher-growth electrical and aerospace businesses. Strategically, the deal sheds a segment and sharpens ETN's exposure to the data center theme driving the 65% growth rate. Interpretation: the market may begin valuing ETN more like a pure-play electrical name once the transaction clears, though the article does not state any valuation impact.

For DAN, the combination with Eaton's Mobility business is the headline event, reshaping what the company becomes.