Schneider Electric Is Our Preferred Way to Invest In the AI Theme Within the Capital Goods Sector

Schneider Electric's extensive portfolios of electrical and software solutions are enablers of several multi-decade secular growth themes, including artificial intelligence, the energy transition, and the electrification of buildings and industry. Schneider earns around 1.5 times more revenue from data centers than any other business in the capital goods sector and its 24% revenue exposure from data centers is also among the highest. Its broad portfolio of electrical and liquid-cooling equipment is well-positioned to benefit from rising demand from data centers as hyperscalers expand capacity to support AI workloads. Schneider aims to operate as a "Rule of 25 business", implying annual revenue growth plus adjusted EBITA margin should exceed 25%.