Customer survey challenges the market narrative that Schneider is a loser in the 800 VDC transition

Overview

The report tests the market view that the transition to 800 VDC and solid-state transformers can be neatly divided into winners and losers. Based on a survey of data center customers, Schneider's product roadmap, evolving industry architectures, and valuation changes, Bernstein concludes that customer trust, industrial-scale deployment capabilities, and integrated system offerings are more important than being the first to possess any single technology, and that Schneider will not necessarily lose share because of 800 VDC.

Core views

The market has often portrayed the 800 VDC transition as a reshuffling of the electrical value chain, with some investors viewing Schneider as a potential loser. Bernstein believes this binary narrative is inconsistent with customer feedback. In the SST awareness survey, 73% of respondents were aware of Schneider's solid-state transformer capabilities, based on a sample of 26, which was 34 percentage points above the peer average. In the purchase-intent survey, Schneider achieved net favorable purchase intent of 87%, based on a sample of 23, 49 percentage points above the peer average and higher than second-ranked Siemens at 74%, leading the peer average by approximately 70 percentage points. By respondent count, approximately 20 respondents would consider purchasing Schneider SSTs, while approximately 19 knew that Schneider had this capability, indicating a potentially significant gap between the market's preconceived technological judgments and actual procurement trust. The report argues that the truly important question is not whether a supplier can demonstrate SST technology, but whether customers trust it to industrialize and deploy the technology at scale. Among 50 survey responses, 64% of respondents said Schneider accounted for more than 20% of their power equipment spending, while 60% said Schneider accounted for more than 20% of their cooling equipment spending; the corresponding figures for second-ranked Vertiv were 36% and 42%. This existing customer base, coverage across both power and cooling products, and experience in scaled delivery make Schneider clearly regarded by the industry as a credible SST supplier. The report therefore concludes that clearer communication of Schneider's capabilities, together with its customer position, challenges the view that its market share must inevitably suffer. 800 VDC is indeed the most transformative transition in data center electrical infrastructure to date, but Bernstein believes some market participants have overstated the pace of adoption and the near-term impact. Industry discussions indicate that developing an SST may not itself be the greatest obstacle; industrializing production and ensuring reliable deployment in large-scale data centers are more difficult, which favors established vendors. Nor is 800 VDC a single architecture: TRUs and SSTs may form a dual-track pathway, reducing the extent to which SSTs directly replace the existing equipment chain. Schneider management previously stated that it does not expect large-scale adoption of new technologies such as SSTs before 2027 and is already planning architectures for the period after 2027. The transition is therefore more likely to evolve in stages rather than through a simple linear switchover. Schneider's 800 VDC portfolio is aligned with Nvidia's product roadmap and terminology such as Power Rack, Power Center, and Power Block. Power Rack can supply up to 1.2MW of DC power to IT racks and up to 4.8MW of AC power to four-rack row groups. Power Center includes pathways such as a low-voltage converter from 400—480VAC to 800VDC, a TRU low-voltage converter from 34.5kV to 800VDC, and an SST from 13.8kV to 800VDC, with each pathway able to supply 4.8MW of DC power to a data hall. Power Block uses an SST to convert 34.5kV to 800VDC and can provide 5—10MW of DC power per pathway. The portfolio demonstrates that Schneider is not absent from this technological transition, but instead offers multiple conversion and power distribution solutions across different stages and architectures. The report further emphasizes that prefabricated and modular data centers may change how value is created. 800 VDC may reduce the equipment value per GW of UPS capacity, but Secure Power Systems includes both three-phase UPS and Prefab solutions and accounted for 32% of Schneider's data center business in 2025. Bernstein believes prefabricated solutions may encourage customers to use a single supplier, helping Schneider gain share and accelerate backlog conversion, and that this positive impact may not yet be fully appreciated. Schneider expects the data center market to grow at a compound annual growth rate of approximately 12%—14% from 2025—2030, significantly above the approximately 3%—4% expected growth rate for the distributed IT market, making integrated system capabilities increasingly important. Valuation performance reflects the earlier winners-and-losers narrative. Since October 12, 2025, the day before Nvidia released its 800 VDC white paper, the valuation multiple of Legrand, viewed as a potential loser, has declined 17%, while that of ABB, viewed as a potential winner, has risen 10%. Schneider also underperformed the peer average for most of the period, only reversing course after a quarter of strong growth and margin performance. The report believes the "800 VDC loser" label may previously have weighed on its valuation. The survey results reduce the perceived inevitability of market share disruption and provide grounds to reassess this discount. The financial forecasts reflect assumptions of sustained growth and margin expansion. Sales are expected to increase from EUR 40,152 million in 2025 to EUR 45,173 million in 2026, EUR 50,936 million in 2027, and EUR 64,156 million in 2030. Reported sales growth is projected at 12.5% in 2026 and 12.8% in 2027, while like-for-like growth is projected at 13.7% and 12.6%, respectively. EBITDA is expected to increase from EUR 8,208 million in 2025 to EUR 9,717 million in 2026, EUR 11,735 million in 2027, and EUR 15,793 million in 2030, with the EBITDA margin rising from 20.4% to 21.5%, 23.0%, and 24.6%. Bernstein assigns an Outperform rating and a target price of 350.00 EUR, representing 19% upside to the closing price of 294.00 EUR on August 19, 2026. The target price is based on a DCF valuation using a WACC of 7.8% and a terminal growth rate of 2.5%, justified by Schneider's strong cash-generation capability and relatively stable cash flows across different phases of the cycle. EV/FCF for 25A, 26E, and 27E is 39.6x, 34.2x, and 25.9x, respectively; adjusted P/E is 34.9x, 28.2x, and 22.2x; and EV/EBITDA is 22.4x, 18.9x, and 15.6x.

Analysis framework

Bernstein first uses a survey of data center customers to test the market assumption that Schneider is a loser from 800 VDC, comparing each supplier's existing share of customer spending, SST awareness, and purchase intent. It then cross-validates the survey results against Schneider's and Nvidia's product roadmaps, the dual-track SST and TRU architecture, and management's statements on the timing of adoption. The report subsequently analyzes the impact of integrated prefabricated solutions on single-vendor procurement, market share, and order conversion, and compares changes in peer valuations following the emergence of the 800 VDC narrative. Finally, it derives a target price of 350.00 EUR using operating forecasts and a DCF framework.

Methodology notes

• Valuation methodologyDCF discounted cash flow

  DCF valuation

  The report discounts Schneider's future cash flows to present value and calculates a target price of 350.00 EUR using a WACC of 7.8% and a terminal growth rate of 2.5%. The method is used because the company has strong cash-generation capabilities and relatively stable cash flows.

• (Method outside the vocabulary)

  Data center customer survey

  Using different survey questions, the report examines customers' spending relationships with suppliers, SST awareness, purchase intent, and the timing of 800 VDC construction, using feedback from actual buyers to test the market's technological replacement narrative.

• Event games and behavioral financeEvent-driven analysis

  Relative valuation changes following the emergence of the 800 VDC narrative

  Using October 12, 2025 as the comparison starting point, the report observes relative changes in the valuation multiples of Legrand, ABB, and Schneider following events related to Nvidia's 800 VDC white paper to assess whether the winners-and-losers narrative affected market pricing.

• Competition and strategy frameworkValue chain analysis

  Value chain analysis from individual technologies to integrated system delivery

  The report analyzes the impact of 800 VDC across power conversion, power distribution, cooling, UPS, and prefabricated solutions, concluding that value may shift from individual components to suppliers capable of industrializing and delivering complete systems at scale.

Asset mapping & comparison

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

• Schneider Electric SA (SU.FP)

  The primary subject of research regarding the transition to 800 VDC, SSTs, and prefabricated data centers; the report argues that its customer trust and integrated delivery capabilities mean it is not necessarily a loser from the technological transition.

  Strengths

  High share of customer spending on power and cooling equipment; leading SST awareness and purchase intent; integrated offerings spanning power conversion, power distribution, cooling, UPS, and Prefab solutions; product roadmap aligned with Nvidia's next-generation infrastructure plans.

  Weaknesses

  The market previously viewed the company as insufficiently positioned in SSTs; 800 VDC may compress UPS value per GW, while the transition architecture and pace of adoption remain uncertain.

  Comparison

  SST purchase intent was 87%, above Siemens at 74%; the percentages of customers for whom Schneider represented more than 20% of power and cooling equipment spending were 64% and 60%, respectively, above Vertiv's 36% and 42%.

  Risks

  The assumption of 13.7% like-for-like growth in 2026 may fall short; technological changes in data centers may reduce demand for some products; new U.S. tariffs may weaken end demand.

Key data

• SST capability awareness73% (n=26)34 percentage points above the peer average
• Net favorable purchase intent for Schneider SSTs87% (n=23)49 percentage points above the peer average; second-ranked Siemens was at 74%
• Percentage of customers for whom power equipment spending exceeds 20%Schneider 64%; Vertiv 36% (n=50)Schneider was clearly ahead of the second-ranked vendor
• Percentage of customers for whom cooling equipment spending exceeds 20%Schneider 60%; Vertiv 42% (n=50)Schneider was clearly ahead of the second-ranked vendor
• Survey on first data center construction using 800 VDCn=34; 16 did not know or could not discussIndicates that the timing of adoption remains highly uncertain
• Secure Power Systems share32% of the data center business in 2025Includes three-phase UPS and Prefab solutions
• Market growth expectationsData centers approximately 12%—14%; distributed IT approximately 3%—4%Compound annual growth rate from 2025—2030
• Peer valuation changesLegrand -17%; ABB +10%Changes in valuation multiples since October 12, 2025
• Sales forecast2025 40,152; 2026E 45,173; 2027E 50,936; 2030E EUR 64,156 millionReported growth rates for 2026E and 2027E are 12.5% and 12.8%, respectively
• Like-for-like growth2026E 13.7%; 2027E 12.6%The 13.7% figure for 2026 is also a key assumption underlying the target price and forecasts
• EBITDA forecast2025 8,208; 2026E 9,717; 2027E 11,735; 2030E EUR 15,793 millionCorresponding margins are 20.4%, 21.5%, 23.0%, and 24.6%
• Valuation multiplesEV/FCF 39.6/34.2/25.9x; adjusted P/E 34.9/28.2/22.2x; EV/EBITDA 22.4/18.9/15.6xCorresponding to 25A, 26E, and 27E, respectively
• Target-price valuation parametersWACC 7.8%; terminal growth rate 2.5%Used for the DCF valuation
• Price and target priceClosing price 294.00 EUR; target price 350.00 EUR; upside 19%Closing price as of August 19, 2026
• 52-week price range312.30/208.80 EURReport price snapshot
• Market performanceYear to date 24.1%; 1 month 10.1%; 6 months 11.3%; 12 months 35.3%Relative performance versus EDME over the same periods was 14.3, 9.0, 8.1, and 18.6 percentage points, respectively

Impact & implications

The report concludes that 800 VDC will not automatically cause Schneider to lose market share. Its customer base, existing share of spending across power and cooling equipment, customer trust in purchasing SSTs, and experience in scaled delivery may offset part of the decline in traditional UPS value. If prefabricated and modular data centers encourage customers to select integrated systems and a single supplier, Schneider could instead gain share and accelerate backlog conversion. The survey results also suggest that the valuation pressure previously caused by the "800 VDC loser" narrative may have been based on oversimplified assumptions.

Risks

• The 2026 forecast assumes that Schneider will achieve 13.7% like-for-like growth, dependent on continued strength in Energy Management and improvement in Industrial Automation; actual performance may fall below this assumption.
• Data center demand may decline, or technological changes may alter the composition of required electrical infrastructure, thereby reducing demand for some Schneider products.
• Additional U.S. tariffs could reduce demand by weakening consumer purchasing power. The report expects Schneider to pass through tariff costs, but demand could still be impaired.

What to watch

• Monitor when customers begin building their first data centers using an 800 VDC architecture and whether the large number of survey responses stating "do not know or cannot discuss" declines.
• Monitor how the dual-track SST and TRU architecture evolves after 2027 and whether SSTs can achieve large-scale industrial deployment.
• Monitor whether the high purchase intent for Schneider SSTs translates into actual orders and market share.
• Monitor whether modular and Prefab solutions promote single-vendor procurement and improve backlog conversion.
• Monitor whether growth in integrated systems and prefabricated solutions can offset the negative impact of 800 VDC reducing UPS value per GW.