1 Canadian Company Set to Make a Fortune From the $650 Billion Data Centre Buildout

The rush to build artificial intelligence (AI) infrastructure is creating opportunities far beyond the tech sector in 2026. Data centres consume enormous amounts of power, and that electricity must be distributed through reliable equipment that can handle demanding workloads. Industry forecasts estimate the global data centre buildout could reach $650 billion, while research and advisory firm Gartner expects worldwide information technology (IT) spending to climb to $6.2 trillion in 2026.

A Canadian company that could emerge as a key winner from this data centre buildout is Hammond Power Solutions (TSX:HPS.A). Its surging sales, solid backlog, and strong growth in custom products tied to data centre projects suggest demand remains robust.

In this article, I’ll discuss why Hammond stock could become a Canadian winner from this massive infrastructure investment.

A top Canadian stock to benefit from the AI data centre buildout

In short, Hammond manufactures dry-type transformers, power quality products, and related magnetics used across data centres, commercial construction, mining, oil and gas, water treatment, and renewable energy projects. The company also has manufacturing facilities in Canada, the United States, Mexico, and India.

Hammond stock currently trades at $312.93 per share, giving it a market capitalization of about $2.9 billion. While its annualized dividend yield is modest at around 0.4%, the stock has rewarded shareholders with exceptional capital gains lately. It has surged 146% over the last year and is up 93% year to date.

Record demand is driving growth

The company’s latest results help explain why investors have become increasingly optimistic about its growth prospects. In the first quarter, Hammond posted record revenue of $264.8 million, up 31.5% year-over-year (YoY). Its strongest growth came from the United States and Mexico, where sales jumped 41.8% as custom transformer shipments rose, driven largely by data centre-related demand. India also delivered a solid 33.5% YoY sales growth, while Canadian sales rose 3.2%.

Even more encouraging, Hammond’s backlog in the latest quarter was 94.6% higher than a year ago and rose 4.1% from the end of 2025 despite record shipments. That clearly reflects that demand continues to outpace deliveries, giving the company good revenue visibility for the rest of the year.

On the profitability side, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 32.8% YoY last quarter to $41 million, while its adjusted earnings rose 29.7% to $2.08 per share. Better pricing and improved factory overhead absorption also helped its gross margin recover to 30.1% in the first quarter from 29.2% in the previous quarter.

However, tariff-related input costs continued to pressure Hammond’s profitability, contributing to a decline in reported net earnings.

Expanding for the next phase

Clearly, the data centre opportunity could become even larger as Hammond continues expanding its capabilities. Its newest manufacturing facility in Mexico began shipping products during the first quarter, increasing production capacity and improving lead times for customers.

Last month, the company also completed its $365 million acquisition of AEG Power Solutions, adding power conversion, critical power, controls, and service capabilities to its portfolio.

Overall, Hammond stock has already delivered outstanding returns, and factors such as tariff-related costs remain worth monitoring. Nevertheless, record sales, a rapidly growing backlog, and expanded manufacturing capacity suggest the company is well positioned to benefit as investment in AI infrastructure and data centres continues to accelerate, which could help its share price keep soaring in the years to come.

The post 1 Canadian Company Set to Make a Fortune From the $650 Billion Data Centre Buildout appeared first on The Motley Fool Canada.

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More reading

• The AI Boom Needs Data Centres: 2 TSX Stocks to Watch Closely
• How Your 2026 TFSA Contribution Could Grow to $280,000 or More
• 1 Canadian Company Set to Soar From the $1 Trillion Data Centre Buildout
• This Canadian Stock Is Up 109% and Still a Great Deal
• What the Average Canadian TFSA Balance Looks Like at Age 50

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hammond Power Solutions. The Motley Fool has a disclosure policy.