EnerSys, which builds the reserve-power systems that keep data halls, telecom sites and warehouse forklifts running when the grid or the shift changes, reported its fiscal first quarter on 13 August. Revenue reached $935.6m, up 4.8%. Operating income rose 75% to $151.4m. Orders from data-center customers were up 80% from a year earlier with 12 to 36 months of visibility, and total book-to-bill came in at 1.06x — more ordered than shipped. The shares are down 18% over three months.

That looks like a divergence. Read one line further down and it is mostly an accounting question.

The credit inside the margin

EnerSys reported gross margin of 33.5%, up 510 basis points, and 28.5% excluding the Internal Revenue Code Section 45X advanced-manufacturing credit. The credit is therefore worth roughly five points of gross margin. On the bottom line it is starker: adjusted earnings of $3.66 a share fall to $2.41 without it — about a third of the total. Strip out a $30.9m tariff refund as well and the underlying figure is $1.78, still up 42%.

The dependence is growing, not fading. Second-quarter guidance of $3.15-3.25 embeds $42-47m of 45X benefit; ex-credit, the guide is $1.95-2.05. And the credit's terms have changed. Under last year's tax law, a primary component integrated into a secondary one at the same plant now requires that at least 65% of direct material costs come from US-sourced primary components, for tax years beginning after 31 December 2026 — which reaches EnerSys's fiscal 2028.

So does the price make sense? A year ago the stock closed at $99.13 against fiscal 2025 earnings of $8.99 a share, near 11x. Today it is close to $194 on trailing earnings of about $9.34 — 20.3x. The multiple almost doubled in twelve months; the three-month fall gives back a slice of that. Forward, 14.7x on consensus of $13.18 for fiscal 2027 is the counterweight, but that consensus contains the credit.

The competitive position is narrower than the order growth suggests. EnerSys sells batteries into data-center power systems dominated by Schneider Electric, Vertiv and Eaton at the integrated-platform level. Its incumbency is in lead-acid, which still holds about 62% of the data-center battery installed base while lithium grows fastest — so the company must win a lithium socket it is only now sampling. Its answer, a high-density lithium cabinet claiming 2.5 times a rival's volumetric density, has 100 units on order and revenue expected in fiscal 2028.

What actually fell

The five smaller names classified alongside EnerSys did not sell off together. Over the past month Enovix fell 29.5% and T1 Energy 25.4%; the other four averaged -2.2%, and EnerSys rose slightly.

Enovix, a Fremont maker of silicon-anode cells for phones, smart eyewear and drones, dropped 18% in one session on 17 August after chief executive Raj Talluri resigned to run Kulicke & Soffa, followed by a William Blair downgrade. Remove those two sessions and its month is roughly flat. Its business went the other way: revenue of $9.0m, up 21%, a fifth straight quarter of growth, positive gross margin at 14.4%, and a defense and drone pipeline up 41% sequentially to $183m. It holds $552m of cash against a $31.4m quarterly outflow — about four years — meaning cash is three-quarters of the market value and the operating business is priced near $190m.

T1 Energy is not a storage company at all. It makes solar cells and modules domestically, and it fell after disclosing on 28 July that capital costs at its Austin cell fab rose about 20% to $510m with first production slipping to the first quarter of 2027, then priced $120m of 4.75% convertible notes.

Eos Energy, which sells zinc-halide batteries for long-duration grid storage, is the one genuine storage pure-play, and it is diverging in both directions at once: revenue of $68.8m, up 351%, record backlog of $807m, against gross margin of -71% and a diluted share count up 43% year on year to 339.8m. Its sales multiple has collapsed to 5.05x trailing from 18.85x in early May. Amprius, making silicon-nanowire cells for drones and aerospace, is the quiet performer — revenue of $34.0m at 27.3% gross margin, near-breakeven earnings before interest, taxes, depreciation and amortization, and 13.8x sales against Enovix's 20.7x. Solid Power, a pre-commercial solid-electrolyte developer for electric vehicles, booked negative revenue in the quarter on an accounting reversal.

Demand is not the problem

US operators added a record 15 GW of utility-scale storage in 2025 and plan roughly 24 GW in 2026. What changed is cost and policy: the Section 301 duty on Chinese non-EV lithium cells rose from 7.5% to 25% on 1 January, in a market where China supplies over 80% of US storage cells, and battery-grade lithium carbonate has roughly tripled from its 2025 trough even as pack prices set fresh lows. Over three months every name here fell, averaging -31%, alongside Fluence at -45% and Vertiv at -31% while the S&P 500 rose. That is the whole power complex losing multiple, not storage losing customers.

The setup

Where it stands — EnerSys's order book is growing while its multiple deflates, with a third of profit resting on a federal credit. Would confirm — Fiscal second-quarter adjusted earnings ex-45X landing at or above the guided $1.95-2.05. Would invalidate — Data-center orders falling below book-to-bill of 1.0x, or the lithium cabinet slipping past fiscal 2028. Watch next — EnerSys fiscal second-quarter results, due in November; Eos's second-year Department of Energy loan tranche. Valuation — 20.3x trailing and 14.7x forward, against roughly 11x trailing a year ago.