Manufacturing Electronics Stocks Rally: Which 4 Names Are Worth Your Attention in 2025?

The electronic manufacturing services sector is showing interesting contrasts right now. On one hand, demand remains fairly solid across key end markets—companies are steadily adopting advanced manufacturing tech, e-commerce keeps fueling orders, and aerospace/defense niches are humming along. On the other hand, the broader manufacturing sector just wrapped up its 10th straight month of contraction, with the ISM Manufacturing PMI sitting at 47.9% in December. That’s a red flag for supply-chain friction too.

So where’s the opportunity? Zacks ranks the Manufacturing-Electronics industry at #52 overall—that’s top 22% territory among 243 industries, suggesting near-term upside despite the macro headwinds. Four stocks stand out as potential plays on this sector recovery: Powell Industries (POWL), Emerson Electric (EMR), Eaton Corporation (ETN), and EnerSys (ENS).

The Tailwinds & Headwinds

Let’s be straight: the industry is caught between competing forces. Digitization is helping manufacturers cut costs and boost productivity. Medical device makers are riding strong demand. E-commerce logistics are a growth engine.

But manufacturing weakness is real. New orders contracted to 47.7% in December, and supplier deliveries slowed notably. Electronic component shortages persist. This explains why the Manufacturing-Electronics industry returned just 5.4% over the past year—underperforming both the Industrial Products sector (up 10.3%) and the S&P 500 (up 19.4%).

Valuation Snapshot

The industry trades at 22.27X forward P/E—slightly above the sector’s 21.68X but below the S&P 500’s 23.38X. Over five years, the range has been 14.48X to 25.64X, with a median of 20.99X. Not exactly cheap, but not egregiously expensive either.

Four Names to Track

Powell Industries (POWL) — Zacks Rank #2

Houston-based Powell is the standout performer, up 55.2% over the past year. The company makes custom electrical distribution and control equipment, and it’s benefiting from strong project pipelines in utility and industrial markets. Energy transition projects—biofuels, carbon capture, hydrogen—are creating extra tailwinds. Most impressive: four consecutive quarters of earnings beats, averaging 8.4% surprise. The stock’s momentum suggests the market believes in this recovery story.

Emerson Electric (EMR) — Zacks Rank #3

Emerson, based in St. Louis, is a diversified engineering and tech play with exposure to power, process, and control systems. Growth across the Americas and Asia regions is driving the Measurement & Analytical business forward. The company’s also seeing solid traction in its power end markets. Up 18.9% over the past year with four straight quarters beating estimates (3.2% average surprise), EMR looks like a steadier ride than Powell.

Eaton Corporation (ETN) — Zacks Rank #3

Dublin-headquartered Eaton is riding the AI data center wave—rising demand for electrical components feeding new infrastructure buildouts. The global reindustrialization trend also works in its favor. It’s lost 3.7% over the past year, but rallied 5.6% in the past month, suggesting potential turning point. Four earnings beats in a row (0.7% average) shows consistency, though the magnitude is smaller than peers.

EnerSys (ENS) — Zacks Rank #3

Pennsylvania-based EnerSys manufactures industrial batteries and is positioned well for aerospace/defense demand. The U.S. communications network expansion—driven by AI data demand—is another tailwind for its Energy Systems segment. Up 19.2% over the past year with an average 4.9% earnings surprise, ENS has delivered solid execution alongside decent share appreciation.

The Takeaway

Three of these four stocks beat estimates consistently, and two (Powell and EnerSys) have already delivered double-digit returns despite sector headwinds. The manufacturing slowdown isn’t going away overnight, but the electronic manufacturing services niche appears positioned to outperform as companies invest in modernization and specialized tech. If you’re looking for exposure, the risk/reward seems tilted toward opportunity right now.