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Powell Industries, Inc. (NASDAQ:POWL) is one of the best grid modernization stocks to buy for AI infrastructure.

On May 4, Powell Industries, Inc. (NASDAQ:POWL) said it was awarded a data center order worth more than $400 million after the end of its fiscal second quarter, calling it the largest order in company history. The order is tied to a behind-the-meter design of on-site generation assets, which makes it directly relevant to AI infrastructure’s power bottleneck rather than just general industrial demand. Powell also booked a mega electric utility order and a mega data center order during the quarter, each worth more than $75 million.

The numbers support the same grid-modernization angle. Powell reported $490 million in new orders, up from $249 million a year earlier, while backlog rose 33% year-over-year to $1.8 billion as of March 31, 2026. The company said demand from data center buildouts, AI capacity growth, and future power demand should remain supportive for its commercial and electric utility end markets. For investors, that puts Powell Industries, Inc. (NASDAQ:POWL) in the electrical distribution and control layer needed to support large-load AI infrastructure.

Photo by mitchel-willem-jacob-anneveldt on Unsplash

Powell Industries, Inc. (NASDAQ:POWL) designs, manufactures, and services custom-engineered equipment and systems used to distribute, control, monitor, and protect electrical energy across utility, industrial, commercial, oil and gas, petrochemical, and other infrastructure markets.

While we acknowledge the potential of POWL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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