North American data center equipment orders remain strong in the near term, but overordering is cannibalizing long-term demand

Overview

Through 30 exhibits, the report reviews the state of cooling and electrical equipment procurement in North American data centers, focusing on overordering, lead times and cancellation terms, modular prefabrication, vendor wallet share, behind-the-meter generation, and 800V DC architecture. Its core view is that near-term equipment demand remains supported, but pulled-forward orders may increase inventory and demand adjustment pressure when capital expenditure slows in the future.

Core views

Bernstein surveyed 50 executives involved in procurement decisions for North American data center projects, approximately 40% of whom were from hyperscale data center operators and approximately 60% from colocation data centers, neocloud providers, and enterprise data centers. The survey drilled down to specific equipment categories such as PDUs, CDUs, and chillers and examined overlapping orders, OEM lead times, cancellation terms, buyer bargaining power, modular infrastructure, vendor wallet share, and next-generation power architectures to determine whether current equipment demand reflects genuine construction intensity or pulled-forward orders. Ordering behavior is the report's most important finding. Approximately 50% or more of respondents engage in so-called "double ordering," although the report believes "overordering" is a more accurate description. Among those employing this practice, a substantial portion place orders exceeding their ultimately expected demand by 20%, with some cases exceeding 50%, depending on the equipment category. The report does not believe this implies near-term oversupply: compared with approximately 12 months ago, lead times for most equipment remain tight rather than shortening materially, while the cost to buyers of canceling orders is also higher than the research team had previously expected. The team had initially worried that customers might be able to cancel after forfeiting less than 10% of their deposits, but the survey does not support this concern. More stringent cancellation terms mean that even if construction slows, customers may still choose to accept some equipment already ordered, thereby supporting near-term deliveries by equipment manufacturers. The same mechanism also creates a long-term risk. Overordering means that some future demand for cooling and electrical equipment has already been brought forward; once data center capital expenditure slows, customers may accumulate surplus equipment inventory, making subsequent order adjustments more severe. The report therefore draws a clear distinction across time horizons: near-term market strength may persist, but a longer-term demand downturn could be more painful because of inventory and pulled-forward orders. Modular and prefabricated infrastructure is expected to gain adoption rapidly. Approximately 60% of respondents expect the share of modular or prefabricated solutions in their next-generation data center projects to increase, while another 40% expect it to remain broadly unchanged; approximately 50% see value in using both IT/cooling pods and power skids. However, even when a vendor can provide both types of modules, respondents show no significant increase in their willingness to procure all power and cooling modules from a single supplier. This means the modular trend itself does not necessarily translate into greater cross-selling or systems integration share for a single OEM. The vendor wallet share survey shows that Schneider has the strongest market recognition: for both electrical and cooling equipment, approximately 60% of respondents allocate more than 20% of their procurement spending to Schneider. Vertiv is a primary supplier for approximately 40% of respondents; the corresponding proportions for Eaton in electrical and cooling equipment are approximately 20% and 30%, respectively. These results confirm the important positions of Schneider, Vertiv, and Eaton in current data center equipment procurement, although each vendor's share varies across equipment categories and customer groups. Regarding power supply, approximately 60% of respondents believe new data center projects will use behind-the-meter generation to meet at least part of their primary power requirements, indicating that on-site or campus-side generation has become a practical way to address data center power needs. The survey also asked about the typical ratio of behind-the-meter generation capacity to planned IT load and the ratio of installed diesel backup generation to IT load, but the report input does not provide the specific distribution of responses to these questions. 800V DC remains at the initial project stage. Approximately 45% of respondents already have 800V DC projects in operation or expect projects to start around 2027; the remaining respondents expect their first related capacity to come online in 2028 or later. Bernstein believes this is broadly consistent with its existing view that the vast majority of industry volume growth will occur in 2028 and beyond, because survey responses refer only to each organization's first project. Regarding solid-state transformers, more than 50% of respondents would consider products from Schneider, Siemens, ABB, GE Vernova, or Eaton. However, the report emphasizes that this field is evolving rapidly and that new product launches and project progress could reorder vendors' competitive positions. Regarding equity coverage, the report rates VRT, NVT, TT, JCI, GEV, Schneider, Siemens, Legrand, Siemens Energy, ETN, HUBB, DLR, EQIX, and CSQR Outperform, with respective target prices of $368, $229, $575, $190, $1298, €350, €330, €170, €210, $534, $584, $226, $1270, and $27; it rates CARR, ENPH, and ABB Market-Perform, with respective target prices of $78, $56, and CHF 80. The report does not provide current prices, expected upside, or explicit rating actions.

Analysis framework

The report first uses respondent type and procurement influence to confirm the sample's relevance to the research question, then surveys overordering, changes in lead times versus approximately 12 months ago, cancellation costs, and buyer bargaining power by specific equipment category. It subsequently compares vendor relationships and wallet share between hyperscale operators and non-hyperscale customers, extending the analysis to modular prefabrication, equipment management software, behind-the-meter generation, 800V DC, and solid-state transformers to connect current procurement behavior with the evolution of next-generation data center architectures.

Methodology notes

• (Method Outside the Taxonomy)

  Survey of Equipment-Level Procurement Decision-Makers

  The report surveys 50 executives who can influence procurement for North American projects and breaks the questions down to equipment such as PDUs, CDUs, and chillers to obtain direct insight into orders, lead times, cancellation terms, vendor selection, and technology adoption plans.

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-Demand Analysis of Orders, Lead Times, Cancellation Terms, and Inventory

  The report combines excess order volumes, OEM lead times, and cancellation costs to assess supply-demand tightness and thereby distinguish near-term delivery support from long-term demand cannibalization.

• Industry/Sector Analysis FrameworkIndustry Concentration Analysis

  Vendor Wallet Share Comparison

  The report compares the market positions of Schneider, Vertiv, Eaton, and other vendors based on whether they account for more than 20% of customer spending on cooling or electrical equipment and the proportion of respondents that regard each as a primary supplier.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• VRT (Vertiv)

  The report rates it Outperform with a $368 target price and states that it is a primary supplier for approximately 40% of respondents.

  Strengths

  Has relatively high primary supplier coverage in North American data center equipment procurement.

  Comparison

  Its primary supplier coverage is below Schneider's standout wallet share performance of approximately 60%.

  Risks

  Long-term equipment demand may come under pressure from pulled-forward orders and customers' surplus inventory.

• NVT

  The report rates it Outperform with a $229 target price.

• TT

  The report rates it Outperform with a $575 target price.

• JCI

  The report rates it Outperform with a $190 target price.

• CARR

  The report rates it Market-Perform with a $78 target price.

  Comparison

  Its rating is below that of most covered names rated Outperform.

• GEV (GE Vernova)

  The report rates it Outperform with a $1298 target price and lists it among the leading vendors considered for solid-state transformer purchases.

  Strengths

  More than 50% of respondents would consider purchasing solid-state transformers from leading vendors including GE Vernova.

  Comparison

  It is in the leading group for solid-state transformer purchase consideration alongside Schneider, Siemens, ABB, and Eaton.

  Risks

  The field is evolving rapidly, and new products and project progress may alter its competitive position.

• ENPH

  The report rates it Market-Perform with a $56 target price.

  Comparison

  Its rating is below that of most covered names rated Outperform.

• Schneider

  The report rates it Outperform with a €350 target price and believes it has the most prominent wallet share among surveyed customers.

  Strengths

  For approximately 60% of respondents, Schneider accounts for more than 20% of procurement spending on both electrical and cooling equipment, and it also leads in solid-state transformer purchase consideration.

  Weaknesses

  The modular trend has not yet significantly increased customers' willingness to procure power and cooling modules from a single vendor.

  Comparison

  Its wallet share performance exceeds that of Vertiv and Eaton as described in the report.

  Risks

  The solid-state transformer market is evolving rapidly, and competitive rankings may change with new products and project progress.

• Siemens

  The report rates it Outperform with a €330 target price and lists it among the leading vendors considered for solid-state transformer purchases.

  Strengths

  More than 50% of respondents would consider purchasing solid-state transformers from leading vendors including Siemens.

  Comparison

  It is in the leading group for solid-state transformer purchase consideration alongside Schneider, ABB, GE Vernova, and Eaton.

  Risks

  New product launches and technological advances may alter its current competitive position.

• Legrand

  The report rates it Outperform with a €170 target price.

• Siemens Energy

  The report rates it Outperform with a €210 target price.

• ABB

  The report rates it Market-Perform with a CHF 80 target price and lists it among the leading vendors considered for solid-state transformer purchases.

  Strengths

  More than 50% of respondents would consider purchasing solid-state transformers from leading vendors including ABB.

  Comparison

  It is in the leading group for solid-state transformer purchase consideration, but its equity rating is Market-Perform.

  Risks

  New products and industry developments may alter the relative positions of solid-state transformer vendors.

• ETN (Eaton)

  The report rates it Outperform with a $534 target price and notes that it has customer recognition across electrical equipment, cooling equipment, and solid-state transformers.

  Strengths

  Approximately 20% of respondents regard it as a primary electrical equipment supplier, approximately 30% as a primary cooling equipment supplier, and it also leads in solid-state transformer purchase consideration.

  Weaknesses

  Its primary supplier coverage is below Schneider's standout wallet share performance.

  Comparison

  Its cooling equipment coverage of approximately 30% is higher than its electrical equipment coverage of approximately 20%.

  Risks

  Pulled-forward equipment orders may increase long-term inventory adjustment pressure, while its competitive position in solid-state transformers may also change.

• HUBB

  The report rates it Outperform with a $584 target price.

• DLR

  The report rates it Outperform with a $226 target price.

• EQIX

  The report rates it Outperform with a $1270 target price.

• CSQR

  The report rates it Outperform with a $27 target price.

Key data

• Survey Size50 procurement decision-makers, 30 exhibitsRespondents participate in procurement decisions for electrical and cooling equipment at North American data centers.
• Respondent CompositionApproximately 40% hyperscale operators and approximately 60% colocation data centers/neocloud providers/enterprise data centersCovers different data center operating models.
• Prevalence of OverorderingApproximately 50% or more of respondentsThe specific proportion varies by equipment type.
• Magnitude of OverorderingA substantial portion exceeds demand by 20%, with some exceeding 50%Reflects buyers placing orders early or repeatedly to secure supply.
• Lead-Time ComparisonCompared with approximately 12 months ago, lead times for most equipment remain tightThe report therefore believes near-term oversupply concerns are overstated.
• Cancellation CostHigher than the research team's previous concern of less than 10% of the depositMore stringent penalties may prompt customers to accept some equipment even if construction slows.
• Modular and Prefabricated OutlookApproximately 60% expect an increase, while 40% expect it to remain broadly unchangedRefers to changes in next-generation data center projects relative to projects currently under construction.
• Value of Power Skids and IT/Cooling PodsApproximately 50% see value in both types of modulesHowever, this did not significantly increase willingness to procure both types of modules from a single supplier.
• Schneider Wallet ShareMore than 20% of electrical and cooling equipment spending for approximately 60% of respondentsStands out among the vendors surveyed.
• Vertiv Primary Supplier CoverageApproximately 40% of respondentsThe report regards it as an important equipment supplier.
• Eaton Primary Supplier CoverageApproximately 20% in electrical equipment and approximately 30% in cooling equipmentCustomer coverage differs between the two equipment categories.
• Perception of Behind-the-Meter GenerationApproximately 60% of respondentsBelieve new data center projects will use behind-the-meter generation for at least part of their primary power supply.
• First 800V DC ProjectsApproximately 45% are already operating or expected to start by 2027The remaining respondents expect their first capacity to come online in 2028 or later.
• Undisclosed Responses to 800V DC Question16 respondentsSelected "Don't know/Unable to discuss."
• Willingness to Purchase Solid-State TransformersMore than 50% of respondentsWould consider Schneider, Siemens, ABB, GE Vernova, or Eaton.
• Sample Sizes for Selected TopicsOverordering N=44; software usage N=50; OEM software utility N=34; solid-state transformer capabilities N=26; purchase consideration N=23Different questions used different effective samples based on respondent eligibility.

Impact & implications

The report believes current equipment vendors can continue to benefit from delivery resilience supported by tight lead times, excess orders, and high cancellation costs, but this strength does not entirely correspond to final installation demand. As modular adoption increases, behind-the-meter generation expands, and 800V DC gradually enters the project stage, the product and vendor landscape will continue to evolve; meanwhile, pulled-forward orders and potential surplus inventory could concentrate the impact of a future capital expenditure slowdown on cooling and electrical equipment vendors.

Risks

• Overordering is pulling future demand forward; after capital expenditure slows, customers may hold surplus cooling and electrical equipment inventory, making the demand downturn more severe.
• The 800V DC and solid-state transformer fields are evolving rapidly, and new product launches and project progress may alter the current vendor competitive landscape.

What to watch

• Monitor when data center capital expenditure slows and whether customers' surplus equipment inventory begins to suppress new orders.
• Observe whether the share of modular and prefabricated infrastructure rises over the coming months as expected by approximately 60% of respondents.
• Watch the actual adoption of behind-the-meter generation in projects beginning construction over the next 12 months.
• Track the construction progress of each organization's first 800V DC project around 2027 and whether the technology can enter a large-scale ramp after 2028.
• Monitor new solid-state transformer products and project progress from Schneider, Siemens, ABB, GE Vernova, and Eaton.