Cummins (CMI) used its 2026 Analyst Day in New York on May 21 to pull forward a story it has been telling for two years: it sells engines, but it increasingly sells power.

The Columbus, Indiana company raised its long-term targets across the board, and Morgan Stanley used the moment to reiterate its bullish call on the stock.

Shares closed at $638.78 on the day of the event and traded near $653 the following session, per Google Finance data, sitting just below a 52-week high of $718.08.

For investors weighing a near-trough truck cycle against a structural AI power story, the firm’s note offers a useful frame.

Cummins announced a $450 million investment to expand high-horsepower capacity by 20 gigawatts.

JHVEPhoto / Getty Images

What Morgan Stanley is telling Cummins shareholders

Morgan Stanley reiterated an Overweight rating on Cummins with a $752 price target, implying roughly 20% upside from the May 21 close.

Analyst Angel Castillo and team wrote that the Analyst Day bolstered their conviction that Cummins is “an attractive investment opportunity with multiple ways to win.“

The firm raised its FY27 adjusted EPS estimate to $34.88 (from $33.85) and FY28 to $40.58 (from $38.18).

Three things behind the Morgan Stanley call:

• A near-trough truck cycle that should turn into a tailwind by 2027 as EPA pre-buys clear.
• Secular AI-driven demand for backup and prime power in hyperscale data centers.
• Capacity expansion the firm views as conservative against likely real-world revenue per gigawatt.

It is worth noting Morgan Stanley discloses an investment-banking relationship with Cummins, a standard conflict to keep in mind.

Why Cummins’ 2030 targets just got a serious upgrade

In its Analyst Day disclosures, Cummins raised every key 2030 number:

• Revenue: $45–$50 billion, up from $43–$48 billion
• EBITDA margin: above 20%, up from 17–18%
• Data center revenue: $9 billion+, up from $3–$4 billion

For context, Cummins generated $33.7 billion in revenue in 2025, according to its 2025 annual report. The new midpoint implies roughly a third more revenue in four years.

The data center number is the headline. Roughly tripling that line item by 2030 reframes Cummins as an AI infrastructure name, not a pure truck supplier.

CEO Jennifer Rumsey told Fox Business the company is positioning to power a wave of data center buildouts globally.

The $450 million capacity bet behind the story

To back the targets, Cummins announced a $450 million investment to expand high-horsepower capacity by 20 gigawatts, lifting total nameplate capacity to 55 GW by 2030.

That builds on a prior $200 million, 9 GW expansion. The new capacity uses the existing manufacturing footprint and starts ramping meaningfully in 2027.

Three product moves that matter:

• A 4-megawatt natural gas engine built on the HSK78 platform, designed for prime power.
• A 5-megawatt battery energy storage system with a 1.5-GW identified opportunity pipeline.
• A broader Tier 4-certified diesel genset lineup that lets units run in prime and peak-shaving mode, not just standby.

Morgan Stanley’s math makes the guide look conservative. Applying today’s implied price-per-kilowatt to 2030’s 55 GW at 85% utilization would put Power Systems revenue at roughly $13.8 billion, about 19% above prior estimates.

In plain terms: the order book already runs through 2028, and in some cases 2029, which lowers the risk that the new capacity sits idle.

How Cummins fits into the broader AI power trade

Power has quickly become the choke point for the AI buildout. Goldman Sachs estimates data center power demand could surge 160% by 2030.

That tailwind has lifted peers like GE Vernova (GEV) on the gas turbine side, and the broader data center power trade has become one of the most crowded in industrials.

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Cummins counts Microsoft (MSFT), Alphabet’s Google (GOOGL), and Amazon (AMZN) as U.S. hyperscaler customers, and Alibaba (BABA) and ByteDance in China.

China is a real edge. Morgan Stanley forecasts Chinese hyperscaler capex hitting $100 billion in 2027, up from $87 billion in 2026.

Cummins’ China JV sales grew 84% year-over-year in Q1 2026, on top of 68% growth in Q1 2025, per the company’s Q1 8-K filing.

Cummins’ truck problem hasn’t gone away

For all the AI excitement, Cummins still leans on heavy and medium-duty trucks, and that business is mid-cycle and messy.

Truck buyers are pulling forward orders ahead of EPA 2027 emissions rules, taking Cummins’ engine production from a historical 240–250 per day to roughly 400 per day by the end of June.

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Management expects a “hangover” in the first half of 2027, though it argues a more fragmented buyer base will soften the drop versus past cycles.

The new X10 engine, announced at Investor Day, will appear on nearly every North American OEM platform, deepening Cummins’ wallet share and aftermarket revenue tail.

For investors, that means engine segment volatility into 2027 even as Power Systems compounds.

What still needs to happen for CMI to reach $752

Morgan Stanley’s $752 base case is not automatic. Several things need to land:

Conditions for the bull thesis to hold:

• Sustained data center order flow, particularly for the new 4MW genset launching in 2028.
• A truck recovery in late 2027 after the pre-buy hangover clears.
• Margin expansion in Power Systems as average selling prices hold and aftermarket scales.
• Reduced losses in the Accelera electrification segment, which management expects to reach breakeven in 2027.

The bear case from Morgan Stanley sits at $430, roughly 33% downside, on a deeper truck downturn or weaker execution in the AI-power segments.

Other firms are also positive. Evercore ISI lifted its target to $845, and Truist set $815 in early May, according to CNN’s stock tracker.

The bottom line for Cummins investors

Cummins is no longer a pure truck cycle story. The $450 million capacity bet, the $9 billion-plus data center target, and the new 4MW gas engine all point to a business reshaped around AI infrastructure demand.

The risks are real: a truck pre-buy hangover in 2027, execution on a new product launch, and a stock already trading near a 52-week high.

But Morgan Stanley’s view, anchored on a 25x base-case EPS multiple, is that the market is still pricing the old Cummins. The new one looks more durable and more diversified, with multiple ways to win across power, distribution, and a recovering on-highway market.

The question to sit with: are you buying a truck supplier with an AI side hustle, or an AI power story with a truck side hustle? For investors tracking the AI power trade, the answer increasingly leans toward the second.

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