Concerns Over Data Center Slowdown Impacting LRA

3 months ago

Khloe Malay

"Now let's talk about LRA shares down as its third quarter sales mis expectations. This is the French industrial company that provides a lot of electrical equipment to data centers. The sales missed for the third quarter because of a slowdown in the data center market, and although the company kept its guidance, analysts have flagged that this unchanged guidance implies a slowdown in sales growth for the fourth quarter. Some analysts have called it a reality check, noting that a boost to the outlook had been widely assumed. The CEO mentioned that all of the 2025 sales growth so far has been driven by data centers, with other segments remaining flat. If the strength in data centers weakens further, it spells potentially bad news for the broader equipment sector."

The segment underscores a bearish view on LRA as slowing data center demand casts doubt on future sales growth, calling into question previously assumed stronger performance.