Assessing Schneider Electric’s (ENXTPA:SU) valuation after $290 million TeraWulf AI infrastructure deal

Schneider Electric (ENXTPA:SU) is making headlines by announcing that it will team up with Schneider Electric’s Motivair to invest more than $290 million in AI infrastructure solutions for TeraWulf’s expanding Mariner Lake data campus in New York.

Check out our latest analysis for Schneider Electric.

The TeraWulf AI Infrastructure announcement comes as Schneider Electric’s stock price is €269.95, with a year-to-date price return of 13.88% and a one-year total shareholder return of 23.86%. This is backed by a 5-year total shareholder return of 126.36%, indicating long-term momentum.

If this AI data center project piques your interest, it may be worth expanding your research into other power and cooling-related parts of the space through our 47 AI Infrastructure stocks.

At €269.95, Schneider Electric’s share price is about 11% below analysts’ average price target, with some intrinsic value estimates suggesting a premium, so the key question is whether there is still room for upside, or whether the market has already fully priced in future growth.

Most popular story: 28.8% are underrated

According to the most followed story, Schneider Electric’s fair value of €379.32 is significantly higher than its current share price of €269.95, which puts the AI ​​Infrastructure news in a broader long-term context.

Schneider no longer just sells circuit breakers. It is building the physical backbone of the AI ​​era.

By 2026, AI rack density will reach 240 kW per rack, making traditional air cooling obsolete. Schneider’s advanced liquid cooling and prefabricated modular solutions have become the industry standard for hyperscalers such as Microsoft and Google.

Read the whole story.

Want to know the basis for that valuation gap? This story relies heavily on compound revenue growth, increasing profitability, and future revenue multiples often associated with pure software leaders.

Result: Fair value 379.32 euros (undervalued)

Read the full explanation to understand what’s behind the predictions.

However, this bright AI and digital grid story still faces risks if data center spending cools and grid upgrade projects and backlogs are delayed or reprioritized.

Learn about Schneider Electric’s key risks to this story.

Another angle on value

This 28.8% undervaluation story lines up oddly with the current earnings multiple. Schneider Electric’s P/E ratio of 36.4x is higher than the appropriate multiple of 34.8x, compared to 29.8x for the European electrical industry and 27.1x for peers, indicating that valuation risk will increase if sentiment cools.

See what the numbers say about this price. Please check the rating breakdown.

next step

The story so far is a mix of optimism and caution, so it makes sense to look at the underlying data for yourself and not rely on a single perspective. As you complete your research, consider both the upside potential and the problems highlighted by our breakdown of 1 significant reward and 1 significant warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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