Cummins Sees Massive Opportunity in Hyperscalers' AI Spending

Cummins is cashing in on the hyperscalers' massive investment in AI infrastructure. The company's Power Systems sales jumped 19% year-over-year in Q2, driven by strong global demand for data center power equipment.

The $750 billion capital expenditure forecast by S&P Global this year will largely be spent on data centers to support AI growth. Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle are expected to collectively spend around 38% of their combined revenue on this infrastructure.

Cummins is well-positioned to benefit from this trend as a leading supplier of backup power for data centers. Its diesel and natural gas generator sets can provide the necessary emergency power when the grid fails.