Xylem: 3 Key Takeaways for Long-Term Investors

Xylem announced plans to divest non-core businesses representing 9% of revenue and restructure into three segments to focus on higher-margin industrial markets. While municipal utilities are deferring discretionary metering orders due to macroeconomic pressures, the company is experiencing strong momentum in data center and AI infrastructure demand, with Applied Water data center orders growing over 200% in Q3 2026. Management views the utility slowdown as tactical rather than structural, with ending backlog growing 13% to $5.5 billion.