「Stock God」 Serenity is bullish on the surge in demand for power transformers, betting that HPS.A has already risen by over 83%.

BlockBeats News, May 29, "Stock God" Serenity stated in a post that Hammond Power Solutions (HPS.A) is approaching a key milestone in the "2 million timeframe," and the stock price has risen by 83.3% since it was mentioned.

He jokingly referred to the company as "Transformers in the Sky" and stated that the current global transformer demand visibility is extremely high, with the company having a solid order backlog and a high market share in the dry-type transformer market. Serenity believes that although the trend of HPS.A is not a typical parabolic surge, it looks like a "highly attractive long-term compounding company."

Previously, Serenity analyzed that the true bottleneck of the current global AI data center expansion is not GPUs, but transformers and high-voltage switching equipment, and revealed that he has taken a long position in Hammond Power Solutions (HPS.A). Serenity pointed out that HPS holds approximately a 23% market share in the dry-type transformer market, covering the liquid-cooled transformer and switchgear supply chain, and these key power infrastructure components currently face a 2 to 5-year supply bottleneck.

He believes that as tech giants like Amazon, Microsoft, Meta Platforms, Alphabet, and Oracle Corporation compete for AI data center construction resources, the future prices of transformer components may continue to rise like NAND flash memory. Serenity cited industry data indicating that about half of the data center construction projects in the United States have been delayed or canceled due to a shortage of power infrastructure, while Canada and Mexico have become important sources of high-power transformers for AI data centers. HPS happens to have production capacity in Canada, Mexico, and the United States.

He also emphasized that HPS's customers include large electrical equipment manufacturers such as Powell and Eaton, which purchase HPS transformers and integrate them into their own switchgear.