ABB Posts Record Orders on Data Center, Automation Demand

(Bloomberg) — ABB Ltd. rallied after the company reported record order intake and profit margins that surpassed views, spurred by rising demand for automation tools and data center-driven investments in electrical grids.  

The Zurich-based industrial supplier is gaining market share, Chief Executive Officer Morten Wierod said in a Bloomberg TV interview after reporting second-quarter results. He said the electrification unit, which supplies power companies, saw double-digit growth. 

Electric utilities “need to invest because the power consumption is increasing in the data center,” Wierod said. “The AI wave, that trend is going to continue for a long time.” 

Orders surged 16% in the second quarter to $9.79 billion, lifted by a single $600 million deal for process-automation tools in the US, the Zurich-based industrial supplier said Thursday in a statement. That outstripped the $8.93 billion average estimate of analysts polled by Bloomberg. 

ABB shares gained as much as 8.5%, the most intraday in over three months. Peers including Schneider Electric SE and Legrand SA also advanced, after the latter also posted a positive update. 

Ebita margins, or the return on sales expressed in earnings before interest, taxes and amortization, came in at 19.2% at ABB, versus the 18.8% estimate. 

Margins increased in the process-automation unit as well as the electrification business that has recently led ABB’s performance. Utilities are seeing greater demand for power, as companies build data centers to handle the expanding use of artificial intelligence.

ABB also reiterated its full-year outlook, while acknowledging some uncertainty in the global environment. 

Wierod said he sees “very strong and good development in the US,” despite some customers delaying investment decisions due to uncertainties on tariffs, especially in the auto industry. 

“It probably will take a quarter or two” before there is a turnaround, he said.  

Citigroup analyst Martin Wilkie expects “small single digit percentage upgrades” to consensus estimates following the second-quarter results.  

ABB is on track to spin off and list the robotics unit in the second quarter of 2026. It was one of the first major strategic moves by Wierod, who wants ABB to focus on more-profitable units such as electrification.

Bloomberg News reported earlier this year that the company is also exploring selling the robotics unit, which could be worth more than $3.5 billion, as an alternative to the spinoff plan.

–With assistance from Tom Mackenzie.

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