Will Forgent Power Solutions (FPS) be Able to Generate the Projected Growth of $5 Billion?

In its first-quarter 2026 capitalist letter, Baron Discovery Fund highlighted stocks similar Forgent Power Solutions, Inc. (NYSE:FPS). Forgent Power Solutions, Inc. (NYSE:FPS) is simply a starring concern institution that designs and manufactures electrical organisation instrumentality utilized successful information centers, the powerfulness grid, and energy-intensive concern facilities. On May 6, 2026, Forgent Power Solutions, Inc. (NYSE:FPS) closed astatine $42.68 per share. One-month instrumentality of Forgent Power Solutions, Inc. (NYSE:FPS) was 36.31%, and its shares gained 47.17% implicit the past 3 months. Forgent Power Solutions, Inc. (NYSE:FPS) has a marketplace capitalization of $12.99 billion.

Baron Discovery Fund stated the pursuing regarding Forgent Power Solutions, Inc. (NYSE:FPS) successful its Q1 2026 capitalist letter:

"Forgent Power Solutions, Inc. (NYSE:FPS) is simply a starring shaper of electrical organisation instrumentality utilized successful information centers, the powerfulness grid, and energy-intensive concern applications. Forgent is simply a low- and medium-voltage instrumentality specializer and focuses connected custom, “engineered-to-order” products (90% oregon much of revenue) whereas larger competitors successful the manufacture mostly absorption much connected higher voltage and modular products. Forgent differentiates itself from competitors by engaging profoundly with customers successful the plan signifier and past offering customized products successful shorter pb times than the modular products sold by competitors.

The institution has astir completed a manufacturing footprint concern which volition enactment $5 cardinal successful revenue, giving it 1 of the largest state-of-the-art manufacturing footprints successful the industry. Plus, it has precise bully visibility with astir $3 cardinal successful annualized orders, with a $1.5 cardinal existent backlog. Electrical equipment, particularly powerfulness transformers, remains a cardinal bottleneck successful the broader information halfway infrastructure build, and Forgent’s capableness readying and manufacturing ratio are uniquely positioned to instrumentality vantage of this supply/demand mismatch. Despite inefficiencies from excess capacity, Forgent already has adjacent best-in-class adjusted currency travel margins, which we expect to proceed to grow arsenic the institution drives much measurement implicit its ample manufacturing footprint. To date, astir of its information halfway concern has focused connected colocators and neoclouds, with precise ample opportunities to prosecute with and enactment larger hyperscale customers going forward. We judge Forgent tin turn its revenues to implicit $5 cardinal successful the adjacent 5 years (from $296 cardinal successful 2025 and an expected $1.3 cardinal successful 2026) supported by continued robust grid and information halfway superior expenditure arsenic good arsenic stock gains from competitors successful the market."