Q1 Earnings Reveal Continued Momentum in Electrification

Key Takeaways

• Strong demand across utilities, data centers, and industrial power infrastructure continued to drive robust order growth during Q1 earnings season.  

• Many companies highlighted capacity constraints and ongoing investment plans, reinforcing expectations for a longer-duration electrification growth cycle.

• Emerging growth areas including high-voltage transmission and fuel-cell-based power solutions are becoming increasingly important as electricity demand accelerates.

Q1 Earnings season is in full swing, and several leading electrification companies continue to highlight strong demand, expanding capacity needs, and emerging growth opportunities. 

Eaton

Eaton, a U.S. electrical bellwether, saw accelerating demand particularly within its Electrical Americas division. Organic order growth was +42% in Q1. While margins were lower in the quarter, management emphasized that ongoing capacity investments are intended to support long-term growth. Eaton doesn’t have enough capacity to meet the electrification megatrend and is investing heavily, which is hurting margins. The CEO called out Q1 as the bottom for this incremental hit – and new capacity should accelerate revenues and profits.  

Eaton Sees Strong Order Growth, as Capacity Expansion Supports Future Margins

Source: Eaton, May 2026

"Our accelerating orders driven by data center orders up 240%, proved continued strong demand and our winning value proposition as an end-to-end solutions provider."  

 – Paulo Ruiz,  Eaton CEO, Q1 2026 Call 

American Electric Power

AEP continues to invest into a rapidly growing electricity demand environment. This boosts utility earnings and the capital base is expected to grow +11% and generate earnings growth of +9% pa. through 2030. Notably, the company announced several high voltage 765kV transmission projects, underscoring the growing importance of grid expansion.  

AEP Is Adding Substantial Supply Across The U.S.

Cumulative contracted load additions

Source: AEP, May 2026

“This is a defining period for our industry. The pace of change is accelerating and the opportunities ahead of us are expanding. Within this environment, AEP is extremely well situated to capture growth given our scale, leadership position in generation and transmission, exceptional execution capabilities, and our operational footprint in some of the fastest-growing regions in the country.”  

– Bill Fehrman, AEP CEO, Q1 2026 Call

Powell Industries

Q1 results highlighted the company’s continued evolution from its roots of supplying switchgear to the oil & gas sector toward serving utilities, industrials, and data center end markets. Orders improved sequentially and year on year to an all-time record, while the company also announced that it was awarded a $400 million order for a behind-the-meter power project following quarter end.  

Powell’s Utility and Commercial Backlog Growth Is Exceptional

Electric utility and commercial & other industrial backlog growing substantially

Source: Powell Industries, May 2026

“Market activity across each of our core markets remains favorable. We remain optimistic that the ongoing investment cycle to support data center build outs and AI capacity growth, in addition to addressing future power demand, will remain supportive of overall activity in our commercial and electric utility end markets. We also anticipate that activity within the gas market, including LNG, gas pipeline and gas-to-chemical end markets, will remain active, driven by the advantaged competitive position which we believe U.S.-based exporters currently maintain.”

– Brett A. Cope, Powell Industries CEO, Q1 2026 Call

Vertiv

Many companies during Q1 highlighted capacity constraints as a key factor shaping growth trajectories. Vertiv, a provider of critical power infrastructure for data centers, delivered +20% growth in Q1 and expects full-year growth to accelerate toward +30% as additional capacity comes online.  The company also highlighted the strength of U.S. demand, with organic sales growth of +44% in the Americas vs. +12% in APAC and -29% in Europe.  

“I like what we're seeing in the industry and the continued evolution of Vertiv. We're still in the early stages of the infrastructure build-out for AI. The urgency has increased, the scale of deployment is larger, and the technical complexity is creating opportunities for companies that can solve system-level problems, which is exactly where we excel.”  

– David Cote, Vertiv Chairman, Q1 2026 Call

Bloom Energy

Bloom makes fuel cells that convert natural gas into electricity without combustion. The technology is gaining traction as data centers seek faster paths to power availability. One key advantage is speed to deployment. During Q1, the company raised guidance materially, supported in part by winning Oracle’s Project Jupiter. The market is focused on new GW deployed but is missing the service and servicing revenue that comes with it giving the business durability. Bloom’s technology may also benefit from the industry’s shift to 800V DC data center architectures,  which aligns naturally with its fuel cell design.  

Fuel Cells Are the Fastest Path to Power

Years from first commercial launch to 1 GW

Source: Bloom Energy, Apr 2026

“At a time where every quarter of delay translates into hundreds of millions in foregone AI revenue and loss of competitive advantage, speed of powered infrastructure development is the difference between leading and following. Becoming the sole power provider for Project Jupiter is a milestone for Bloom, but it's not going to be a one-off project; where Oracle is going is where the broader market is headed.”  

– KR Sridhar, Bloom Energy, CEO, Q1 2026

What This Means for Investors

Electrification investment continues accelerating across the value chain, spanning utility infrastructure, high-voltage transmission, and on-site power solutions (behind the meter). In several areas, demand continues to outpace available capacity, creating  a supportive backdrop for sustained growth. Tema's Electrification ETF (VOLT) invests in the full universe of companies benefiting from this megatrend.

For current holdings and prospectus, visit the VOLT fund page.