Cummins (NYSE: CMI) Positioned for Growth in AI Data Center Power Market

• CICC initiated an "Outperform" rating on Cummins, citing its crucial role in the expanding data center industry.
• Cummins' Power Systems segment is experiencing significant sales growth, driven by increasing global demand for AI infrastructure and reliable backup power.
• The company is strategically evolving into a broader power infrastructure platform, including supplying battery energy storage systems for future data center needs.

On August 23, 2026, analyst firm CICC initiated coverage on Cummins (NYSE: CMI), giving it an "Outperform" rating when the stock price was $587.68. Cummins is a company that designs, manufactures, and distributes engines, filtration, and power generation products. It is now shifting its focus to capitalize on new technological demands.

The positive rating reflects Cummins' growing role in the data center industry. Major technology companies like Alphabet, Amazon, and Microsoft are expected to spend around $750 billion on capital expenditures in 2026. This spending is largely for AI infrastructure, which requires the reliable backup power that Cummins provides.

This trend is already boosting Cummins' financial results. The company's Power Systems sales increased by 19% year-over-year in the second quarter, driven by global demand for data center equipment. This segment also reported a strong EBITDA margin of 24%. EBITDA is a measure of a company's profitability from its main operations.

As highlighted by Seeking Alpha, Cummins is evolving from an engine supplier into a broader power infrastructure platform. The company projects its data center revenue to grow from $5 billion in 2026 to over $9 billion by 2030. This growth is expected to come with high incremental margins of nearly 25%.

Further supporting this evolution, Cummins announced it will supply battery energy storage systems (BESS) for a large U.S. data center project, as detailed in the news from Business Wire. This move into battery storage for managing AI-driven power loads shows the company is adapting its technology for future data center needs.