Bernstein Report Analysis: Data Center Pipeline at 456 GW, Stalled Capacity Hits Record 51.7 GW

The data center project pipeline reached 456 GW in September, adding 52 GW month-over-month, representing a 13% MoM increase. Deferred capacity rose to 51.7 GW, setting a record high and accounting for 11% of the total pipeline. Bernstein believes that AI data center construction demand continues to expand, while local opposition and approval constraints are accumulating simultaneously.

In its US Industrial & Technology report released on October 11, 2026, Bernstein noted that hyperscalers and developers continue to drive pipeline growth, with under-construction capacity increasing by 7 GW month-over-month. The report also warned that 27 states are implementing or considering restrictions on new data centers, suggesting that deferred capacity may continue to rise.

Pipeline growth is driven by developers and hyperscalers, while deferred capacity and state-level constraints accumulate in tandem, clarifying the Total Addressable Market (TAM) for electrical equipment.

Total Pipeline Reaches 456 GW

The total pipeline increased from 404 GW in August to 456 GW, adding 52.2 GW in a single month. Year-over-year growth stands at 173%, with year-to-date growth at 82%. Rolling 12-month new pipeline additions amount to 289.1 GW.

Hyperscaler pipeline accounts for 68.7 GW, with a monthly increase of 10.1 GW. Google added 3.9 GW, Amazon added 3.8 GW, and Meta added 2.4 GW. Developers account for 38% of the pipeline, adding 24.6 GW this month. Colocation providers account for 12% of the pipeline, adding 7.6 GW this month. Developers and hyperscalers were the primary sources of pipeline growth this month.

Behind-the-meter (BTM) project pipeline stands at 192.5 GW, increasing by 29 GW this month, a 18% MoM growth. BTM accounts for 42% of the total pipeline, up from 39% at the beginning of the year. Developers show the highest reliance on BTM, accounting for 60% of their pipeline; cloud providers account for 58%.

Regionally, Texas leads with a pipeline of 116 GW, nearly three times that of the second-ranked state. Utah added 10.8 GW this month, the largest increase among all states. Texas added 7.9 GW this month, down from 14.5 GW in August.

Under-Construction Capacity Increases to 80 GW

Under-construction capacity rose from 72.9 GW in August to 79.9 GW, adding 7 GW in a single month, representing a 10% MoM increase. Year-over-year growth stands at 153%, with rolling 12-month additions totaling 48.4 GW.

Under-construction capacity for hyperscalers stands at 31.4 GW, with a monthly increase of 3.4 GW. Google added 2.1 GW, Microsoft added 1 GW, Amazon decreased by 0.3 GW, and Meta decreased by 0.1 GW. Under-construction capacity for colocation providers increased by 1.4 GW, cloud providers by 1.1 GW, and developers by 0.9 GW.

Texas has 20 GW under construction, adding 3.4 GW this month, up from 1.9 GW in August. Virginia has 9 GW under construction, and Ohio has 5 GW. At current construction rates, it would take 13.3 years to digest the 456 GW pipeline, slightly longer than last month's 13.1 years.

Among under-construction capacity, hyperscalers account for 39%, colocation providers for 29%, and cloud providers for 9%. Amazon, Google, and Meta collectively represent 80% of hyperscaler under-construction capacity.

Deferred Capacity Hits Record High

Deferred capacity increased from 49.6 GW in August to 51.7 GW, adding 2.1 GW in a single month, a 186% year-over-year growth. Deferred capacity accounts for 11% of the total pipeline, matching last month's share and setting a record high.

27 states are currently restricting or considering restrictions on new data centers, up from 25 last month. Approximately 70% of the pipeline and under-construction capacity are located in states holding governor elections in 2026. If public sentiment continues to deteriorate, capacity facing potential suspension risks could nearly double.

Within deferred capacity, developers account for 32%, colocation providers for 16%, hyperscalers for 10%, and undisclosed entities for 38%. BTM projects account for 25% of deferred capacity, up from 16% in May.

Electrical Equipment TAM Calculated

Bernstein calculated the Total Addressable Market (TAM) for data center electrical equipment based on the current pipeline and a $5 million opportunity per megawatt. Quanta Services (PWR) TAM is $684.3 billion, Vertiv (VRT) is $164.2 billion, Schneider Electric is $121.8 billion, Eaton (ETN) is $106.7 billion, and ABB is $91.2 billion.

In terms of portfolio allocation, Bernstein maintains Overweight ratings for Eaton, Hubbell, Quanta Services, Legence, Jacobs, Forgent, Trimble, and United Rentals. Target prices are set at $534 for Eaton, $584 for Hubbell, $775 for Quanta Services, $103 for Legence, $163 for Jacobs, $48 for Forgent, $73 for Trimble, and $1,317 for United Rentals.

Market consensus expects hyperscaler capital expenditure to reach $771 billion in 2026, an 87% year-over-year increase. Growth is projected to reach 40% in 2027, hitting $1.1 trillion. Bernstein believes that demand for electrical equipment is driven by data center construction, supported by strong order volumes and backlogs.

Bernstein remains optimistic about the electrical equipment sector, identifying Eaton, Quanta Services, and Vertiv as key beneficiaries. Strong data center pipeline growth drives positive outlooks, while deferred capacity and state-level restrictions remain primary risks. Order visibility supports multi-year growth.

Disclaimer

This article is compiled and interpreted by Chaoxiang Research based on third-party brokerage research reports (Bernstein, October 11, 2026), integrated with public market information. The ratings, target prices, earnings forecasts, and related judgments cited herein reflect the views of the respective brokerage analysts, representing only the stance of their affiliated institutions, not Chaoxiang Research's perspective, and do not constitute any investment advice.

Markets carry risks; decisions must be independent. This article should not serve as the basis for buying or selling any securities.

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