Forgent Power hits $8 billion valuation in NYSE debut as AI infrastructure demand accelerates

Forgent Power valued near $8 billion in NYSE debut as AI infra demand grows

Feb 5 (Reuters) - Forgent Power (FPS.N), opens new tab was valued at nearly $8 billion in its New York Stock Exchange debut on Thursday, as investor appetite for companies catering to the AI boom remains healthy despite pockets of worries the market may have overheated. Surging investment in AI has driven spending on the infrastructure behind it, with cloud providers, chip firms and investors expanding computing capacity, accelerating data center buildouts worldwide. Forgent, which designs and manufactures electrical distribution equipment used in data centers, and some of its existing shareholders sold 56 million shares in the IPO priced at $27 each, raising about $1.51 billion. The company braved significant market volatility this week to complete its listing. The IPO market is poised for a breakout year, with pent-up demand and a pipeline of high-profile companies lined up for 2026, after a years-long slump that finally showed signs of easing in the second half of 2025. "Forgent pricing its IPO at the midpoint indicates a healthy but disciplined investor demand despite the challenging market conditions this week," said IPOX Research Associate Lukas Muehlbauer. AI DATA CENTER BOOM Unlike traditional workloads, AI models demand dense clusters of specialized chips, along with significant electricity and cooling capacity, pushing operators to redesign facilities and expand capacity. The shift has turned data center infrastructure into a critical part of the AI supply chain as companies race to scale computing resources. "Forgent's operation as a critical infrastructure provider offers exposure to the AI sector through its datacenter power equipment, distinct from exposure through the tech firms themselves," Muehlbauer said. "Recent spending surges from hyperscalers like Google confirm the growing demand for essential datacenter equipment and Forgent could be a beneficiary of this ongoing trend." Forgent Power said in its IPO prospectus that it earned 42% of its total revenue from data centers in full-year 2025, followed by grids and industrials at 23% and 19%, respectively. Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Manya Saini Thomson Reuters Manya reports on prominent publicly listed U.S. financial firms, including Wall Street's biggest banks, card companies, asset managers, and fintechs. She also covers late-stage venture capital funding, initial public offerings on U.S. exchanges, and regulatory developments in the cryptocurrency industry. Her work appears in the finance, markets, business, and future of money sections of the Reuters website. A passionate reader, she loves books across genres, from classics to contemporary fiction. She holds an undergraduate degree in Political Science from the University of Delhi and a master's in journalism from the Symbiosis Institute of Media and Communication.

Forgent Power valued near $8 billion in NYSE debut as AI infra demand grows

Feb 5 (Reuters) - Forgent Power was valued at nearly $8 billion in its New York Stock Exchange debut on Thursday, as investor appetite for companies catering to the AI boom remains healthy despite pockets of worries the market may have overheated. Surging investment in AI has driven spending on the infrastructure behind it, with cloud providers, chip firms and investors expanding computing capacity, accelerating data center buildouts worldwide. Forgent, which designs and manufactures electrical distribution equipment used in data centers, and some of its existing shareholders sold 56 million shares in the IPO priced at $27 each, raising about $1.51 billion. The company braved significant market volatility this week to complete its listing. The IPO market is poised for a breakout year, with pent-up demand and a pipeline of high-profile companies lined up for 2026, after a years-long slump that finally showed signs of easing in the second half of 2025. "Forgent pricing its IPO at the midpoint indicates a healthy but disciplined investor demand despite the challenging market conditions this week," said IPOX Research Associate Lukas Muehlbauer. AI DATA CENTER BOOM Unlike traditional workloads, AI models demand dense clusters of specialized chips, along with significant electricity and cooling capacity, pushing operators to redesign facilities and expand capacity. The shift has turned data center infrastructure into a critical part of the AI supply chain as companies race to scale computing resources. "Forgent's operation as a critical infrastructure provider offers exposure to the AI sector through its datacenter power equipment, distinct from exposure through the tech firms themselves," Muehlbauer said. "Recent spending surges from hyperscalers like Google confirm the growing demand for essential datacenter equipment and Forgent could be a beneficiary of this ongoing trend." Forgent Power said in its IPO prospectus that it earned 42% of its total revenue from data centers in full-year 2025, followed by grids and industrials at 23% and 19%, respectively. (Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)