INNIO: Data Center Power Demand Drives Bull Case, But Valuation Is Full

The data center power play is pulling in another name. INNIO, the gas-engine maker spun out of GE two years ago, is getting a fresh look as hyperscalers scramble for backup generation capacity. At $42, the stock is up roughly 18% from its March lows, and the narrative around it has shifted from industrial laggard to AI infrastructure supplier.

The bull case is straightforward. INNIO's Jenbacher and Waukesha engines run on natural gas and can fire up within minutes – useful for data centers waiting on grid connections that are years away. The company booked $1.2 billion in orders last quarter, up 22% year-over-year, with data center backlog making up a bigger share than at any point in the last three years. Management told analysts on the April call that the segment now accounts for