Can you believe it?

An engine-selling company has transformed into an AI concept stock.

Since the start of the year, Weichai Power's stock price has soared from 17.40 yuan to a peak of 36.34 yuan, marking a staggering increase of up to 109%. As of September 15, the stock price stands at 26.04 yuan, reflecting an intra-year increase of nearly 50%.

This surge is not fueled by its traditional heavy-duty truck business but by the sudden spike in power generation demand from AI data centers.

The underlying logic is straightforward. As more AI data centers are constructed, the need for backup power escalates. Weichai's large-bore diesel engines are the linchpin of this backup power system.

What's remarkable is that Weichai appears to be the sole beneficiary of these dividends.

Yuchai and Dongfang Electric New Energy Science & Technology have also seen increased attention. Yuchai International's stock price surged by about 66% at its peak this year, while Dongfang Electric New Energy Science & Technology's stock price soared by over 80%. However, as of September 15, both companies' stock prices have dipped below their year-start levels, retracting by about 45% and 51% from their intra-year highs, respectively.

This raises the question: Why did only Weichai thrive amidst the same industry dividends?

/ 01 / AI Revalues Weichai

This year, Weichai was propelled into the limelight by AI.

As of September 15, Weichai Power's stock price has climbed from 17.40 yuan at the year's start to 26.04 yuan, marking an intra-year increase of nearly 50%. In May, it peaked at 36.34 yuan, with a stage increase of up to 109%.

However, its financial performance tells a different tale.

In the first half of the year, Weichai's revenue reached 123.163 billion yuan, up 8.85% year-on-year; its net profit attributable to shareholders, excluding non-recurring items, was 6.119 billion yuan, up 18.86% year-on-year.

For a traditional cyclical stock that once doubled in stock price, a profit increase of less than 20% clearly doesn't justify such a surge.

What the market is truly revaluing is a relatively obscure business within the group—data center power generation.

AI data centers require not only a stable primary power supply but also a backup power system that can take over instantly. In the event of a power outage, diesel engines will drive generator sets to ensure uninterrupted server operation.

This demand didn't emerge in the AI era. The "Code for Design of Data Centers" GB 50174-2017, released in 2017, mandates that Class A data centers for critical scenarios like finance, telecommunications, and traffic control adopt dual power supplies and set up backup power, which can be provided by independent diesel generator sets. For Class B data centers in important operational scenarios such as research institutes, universities, and government office buildings, if there is only one power supply, diesel generator sets must also be configured.

Thus, it's not that "data centers suddenly need diesel engines" but that a long-standing rigid demand has been amplified by AI.

As the leading engine manufacturer, Weichai has directly capitalized on this incremental demand.

The noticeable change is that data centers have started purchasing high-power diesel generators in bulk.

In July 2025, the second phase of the Zhejiang Cloud Computing Big Data Center was delivered with 15 Weichai 12M55 diesel generator sets; two months later, a data center project in Zhongwei, Ningxia, received another delivery of 60 12M55 units, with 45 Weichai units already operational locally.

This year, demand continues to surge. In the China Mobile procurement of high-voltage water-cooled diesel generators for 2026-2027, announced in April, the procurement scale reached 245 2MW units, with Weichai Heavy Machinery securing 70% of the share, becoming the top supplier in this round of procurement.

These orders are ultimately reflected in the financial statements.

In the first quarter of this year, the company's sales of engines for data centers exceeded 500 units, up more than 240% year-on-year. By the first half of the year, sales of data center power generation products had surpassed 1,400 units, up 137% year-on-year, with half-year sales already exceeding the total for 2025.

AI hasn't made Weichai switch businesses but has opened up a new growth avenue for its engine business.

/ 02 / Why Did the Market Choose Only Weichai Amidst the Same AI Dividends?

The AI-driven engine boom isn't exclusive to Weichai. Yuchai and Dongfang Electric New Energy Science & Technology were also once in the market's spotlight.

Yuchai International's stock price surged from 37.02 USD at the year's start to a peak of 61.48 USD, up about 66%; Dongfang Electric New Energy Science & Technology's stock price rose from 6.09 yuan at the year's start to a peak of 11.14 yuan, up more than 80%.

However, as of September 15, both companies' stock prices have fallen below their year-start levels, retracting by about 45% and 51% from their intra-year highs, respectively.

While the stock prices have retreated, the data center business hasn't. Yuchai's sales of AIDC engines in the first half of the year were about 1,800 units, even higher than Weichai's 1,400-plus units; Dongfang Electric New Energy Science & Technology's sales of 12VK and 16VK high-power engines in data centers and other markets also increased by 221.7% year-on-year.

Despite the same industry dividends, only Weichai has sustained its gains.

One reason is Weichai's deeper globalization. The same backup power business targets a larger global market.

In the first half of 2026, Weichai's overseas revenue approached 63 billion yuan, accounting for more than 51% of its total revenue. During the same period, Dongfang Electric New Energy Science & Technology's overseas revenue accounted for only about 7%; Yuchai did not disclose its overseas revenue for the first half of 2026, but its direct export revenue accounted for only 1.6% in 2025, clearly not on the same scale as Weichai's overseas business.

With an existing overseas business base, Weichai can directly leverage its established channels, customers, and service systems when data center demand arises.

In January this year, Weichai's French engine brand, Baudouin, delivered 16M33, 20M33, and 12M55 data center units in bulk in Southeast Asia and has since received multiple large-scale repeat orders from local customers.

Latin America has also witnessed actual projects, with a large-scale data center under construction locally purchasing three 16M55 units.

In its half-year report, Weichai further revealed that it has entered the "core supply chains of global leading data centers and cloud service providers."

While competitors are also expanding overseas—Yuchai has secured a 200MW-level data center project in Southeast Asia this year, and Dongfang Electric New Energy Science & Technology is advancing overseas certifications—Weichai has clearly moved faster, progressing from individual projects to bulk deliveries, customer repeat orders, and supply chains of leading clients.

On the other hand, after going overseas, the demand for data centers is also extending into the primary power supply market.

Currently, the most direct incremental demand in China comes from diesel backup power for data center construction. However, in markets like Europe and the United States, AI data centers are expanding so rapidly that the grid's new supply and connection speeds cannot keep up. Some projects, unable to wait for the grid, have started building power plants directly beside data centers.

In 2025, Crusoe, the developer of OpenAI's Stargate data center in Texas, placed two separate orders with energy equipment provider GE Vernova for 29 gas turbines, with a total power supply capacity of nearly 1GW, directly deployed in AI data center projects.

Moreover, this business is continuing to grow. In the first half of 2026, GE Vernova's orders from data centers exceeded 5 billion USD, more than double the total for 2025.

This means that engine manufacturers' business is no longer limited to backup power "for use during outages" but has expanded to primary power supply used daily by data centers.

And Weichai is already venturing into this market.

The first implementation is in gas power generation. The latest target set by management is to ship 200-300 gas generator sets in 2026 and exceed 2,000 units by 2027, with target orders already locked in by customers.

Looking ahead, SOFC is also transitioning from technical verification to commercial orders, with 15MW orders already signed and a 30MW production line planned to be in place by the end of this year.

While competitors are also making layouts, their progress is clearly lagging. Yuchai's North American gas engines are still undergoing certification, and Dongfang Electric New Energy Science & Technology's large natural gas engines are still in the research and development stage.

These changes will ultimately be reflected in profits. Goldman Sachs estimates that the AIDC power generation business contributed about 12% of Weichai's net profit in 2025; by 2027, this proportion could rise to 50%, or about 11.3 billion yuan, with gas generator sets for primary power supply expected to contribute about 7 billion yuan.

Therefore, while all have benefited from the AI data center boom, Weichai has truly gained an additional layer of imagination space in the global market and primary power supply.

/ 03 / Conclusion

However, Weichai's new narrative has not yet fully translated into performance.

Currently, the only significant scale is in diesel-powered backup power for data centers. Natural gas primary power supply is just beginning to scale, and SOFC is even further from contributing revenue.

Moreover, in the overseas primary power supply market, Weichai's competitors will shift from Yuchai and Dongfang Electric New Energy Science & Technology to global giants like Cummins and Caterpillar.

So, the current stock price already reflects the market's optimistic expectations in advance.

AI has indeed opened up new growth space for Weichai, allowing it to potentially move away from being purely a cyclical engine stock in terms of valuation. However, how much of this growth premium will ultimately remain needs time to verify.

By Yuanyuan