Rockwell Automation Proves Reshoring and PLC-Led Data Center Demand in Q2 2026
Rockwell Automation Inc. (ROK) has delivered fiscal second-quarter 2026 earnings that strongly validate the domestic manufacturing reshoring thesis while revealing a highly profitable, underappreciated growth engine in data centers. Rockwell reported 12% year-over-year sales growth (9% organic) and an adjusted EPS of $3.30, beating estimates and representing a 32% increase over the prior year. Consequently, management raised its fiscal 2026 adjusted EPS guidance to a range of $12.50 to $13.10.
Rockwell's performance sits at the center of what Morgan Stanley outlines as a structural, decades-long $10 trillion US reshoring thesis. As trade policies and tariffs narrow the cost gap between domestic and international manufacturing, automation allows U.S. factories to substitute expensive labor with electricity-powered automated processes. This structural shift has triggered a massive capital expenditure cycle; U.S. industrial machinery orders have rallied approximately 50% since the onset of the reshoring cycle.
Crucially, Rockwell is capturing a massive new growth vertical in data centers. Historically a low single-digit percentage of Rockwell’s revenue, the data center category grew more than 100% year-over-year in fiscal Q2 2026. This surge is driven by data centers transitioning to intensive industrial controls, specifically Rockwell's programmable logic controllers (PLCs) and Logix systems, to manage complex power and cooling infrastructure. Because the Logix platform carries ~60% incremental margins on premium gross margins, data center growth is highly accretive to Rockwell's profitability. Rockwell also completed the dissolution of its Sensia joint venture on April 1, 2026, removing a margin-dilutive drag and adding a 20 basis-point tailwind to operating margins in the second half of the year.