Schneider Electric shares jumped more than 7% in Paris trading after the French industrial group raised its financial guidance for 2026. The company cited strong demand from artificial intelligence and cloud providers investing in new data centers as a primary driver of this upward revision.
The company increased its 2026 organic revenue growth forecast to a range of 10-13%, up from the previous estimate of 7-10%. Additionally, Schneider Electric raised its expectation for adjusted operating profit organic growth to 14-19%, compared to the earlier projection of 10-15%, and increased its expectation for adjusted operating profit margin organic increase from 50-80 to 70-100 basis points.
In the first half of the year, Schneider Electric reported profit gains, with net profit rising to €2.49 billion, an increase from €1.91 billion in the same period last year. Adjusted EBITA hit €4.09 billion, surpassing the market consensus of €3.8 billion.
Data Centers Offset Industrial Weakness
While traditional industrial markets in the United States and China remain weak, the surge in data center activity is compensating for these losses. Schneider Electric provides power distribution systems, uninterruptible power supplies, server cabinets, and cooling equipment essential for these facilities. Most of this capacity is currently concentrated in North America, though demand from Southeast Asia is accelerating.
Currency fluctuations presented a challenge during the second quarter. Foreign exchange movements, particularly the depreciation of the US dollar and Indian rupee against the euro, resulted in a €124 million negative impact on revenues. The company estimated that if current exchange rates persist, full-year 2026 revenues could face a loss of €400-500 million.
Looking ahead, it has been reported that conflicts in the Middle East could pressure global supply chains and costs in the second half of the year. There are also reports suggesting that rising energy prices and logistics expenses could increase production costs.