Rockwell Automation Targets Data Centers as New Growth Driver

Rockwell sees resilient demand across manufacturing sectors

Rockwell Automation is positioning data centers as a significant new growth opportunity while traditional manufacturing customers continue investing in productivity improvements despite macroeconomic headwinds, CEO Blake Moret told investors at Morgan Stanley's 14th Annual Laguna Conference.

The industrial automation provider reported low-double-digit growth in automotive, high-single-digit expansion in home and personal care, and approximately 10% growth in life sciences during its most recent quarter. Moret characterized overall customer sentiment as "distinctly positive," with North America remaining an attractive destination for manufacturing investment.

Why it matters

Rockwell's pivot toward data centers reflects how AI infrastructure buildout is creating demand beyond traditional tech suppliers. As hyperscalers race to expand capacity, industrial automation companies with expertise in power management, cooling systems, and intelligent material handling are finding new revenue streams. The company's maintained growth targets suggest management believes this opportunity can offset any near-term softness from trade policy delays.

Labor scarcity drives automation adoption

With U.S. unemployment hovering around 4.1% to 4.2%, manufacturers face persistent challenges filling specialized roles. Moret identified labor constraints as a consistent driver of automation investment, with customers seeking technologies that enhance worker productivity while addressing difficult-to-staff positions.

This dynamic is supporting demand for Rockwell's portfolio even as some organizations delay major capital expenditures due to uncertainty around tariffs and trade policy.

New capacity projects in focus

Rockwell expects growth from greenfield projects in three sectors: semiconductors, life sciences, and data centers. The company is investing in software-defined automation, artificial intelligence integration, robotics, and intelligent material movement systems to serve these markets.

Additional momentum is coming from warehouse automation and parcel handling applications, Moret noted.

Trade uncertainty creates project delays but not strategy shifts

While some customers are postponing large capital projects due to trade-policy uncertainty, Rockwell continues pursuing long-term investments, including construction of a new manufacturing facility in Wisconsin. Management reaffirmed its target of 6% to 9% annualized revenue growth through economic cycles, with pricing discipline and operational efficiency initiatives expected to support margin performance.

The company's modernization business—upgrades to existing manufacturing lines rather than entirely new facilities—continues generating activity across traditional end markets, providing a buffer against delays in larger projects.

These details were first reported by Automation Watch based on Moret's remarks at the Morgan Stanley conference.