PSIX Poised to Benefit from Explosive AI Data-Center Expansion

Power Solutions (PSIX), incorporated in 2011 in the state of Delaware and based in Wood Dale, Illinois, is engaged in the development, manufacturing, marketing, and sale of power systems and electricity-generation equipment. PSIX offers a wide range of products, including backup and prime generators, load-management solutions, microgrids, cogeneration systems, and other solutions.
Investment highlights
Growth of data centers and energy demand driven by AI development
The explosive growth of AI and cloud infrastructure is leading to unprecedented demand for backup and prime power-generation installations. These facilities require round-the-clock, highly reliable, high-capacity power supply, making the power-generation market one of the key beneficiaries of this new technological wave. Against the backdrop of structurally rising energy consumption by data centers, PSIX is actively strengthening its presence in this market. The company is placing strategic emphasis on higher-margin segments while gradually reducing its exposure to low-margin traditional areas.
Initiatives to accelerate data-center development
The Trump administration aims to speed up grid-connection procedures for the rapidly expanding data-center sector, proposing to limit the Federal Energy Regulatory Commission’s (FERC) application review period to 60 days. This initiative is intended to remove infrastructure bottlenecks and sustain the growth momentum of AI-driven data centers. For PSIX, this could become an important growth driver. Faster project timelines and further expansion of energy-intensive data centers are likely to increase demand for the company’s engine systems and power solutions.
Strong financial performance
In Q2 and Q3, the company posted double-digit revenue growth, increasing sales by 74.0% and 62.0% y/y to $192M and $204M, respectively. Such high growth rates point to strong and resilient demand from data centers, which continue to aggressively expand capacity and modernize infrastructure. Diluted EPS grew by an impressive 60% y/y in Q3 2025, reflecting both operational improvements and effective execution of strategic initiatives in key business areas. Meanwhile, the operating margin remains at a high level of around 14%, which is especially significant for a company in a phase of active expansion.
Attractive current valuation
At present, PSIX shares appear substantially undervalued relative to peers. The company’s P/E is 9.9x, which is nearly three times below the industry median (around 26x)—while PSIX is showing explosive growth in the first half of the year. The EV/EBITDA multiple also trades at a notable discount—about 10.8x versus the industry median of 15x.
Target price: $83; stop-loss: $43; upside potential: 59%.