How FTAI Aviation Capitalized on the AI and Data Center Power Boom

The surge in artificial intelligence applications has triggered an unprecedented demand for data center infrastructure and power solutions. FTAI Aviation, a company often overlooked in mainstream investment discussions, has positioned itself to benefit from this trend. With a 219% surge over the past 12 months, the stock has attracted renewed attention, particularly following strategic partnerships forged with technology leaders including Palantir and GE Aerospace.

A New Growth Engine: Converting Engines into Data Center Power

FTAI Aviation’s traditional business revolves around acquiring and servicing aircraft engines for airlines and leasing companies, offering cost-effective maintenance alternatives when manufacturers’ original service contracts expire. The company specializes in engines like the V2500 and CFM56 models, which power legacy aircraft such as the Airbus A320 and Boeing 737 families.

However, the company has evolved beyond its core aircraft engine servicing business. In a significant expansion move, FTAI announced the launch of FTAI Power, a division dedicated to converting retired CFM56 engines into turbines that supply electricity to data centers. This pivot directly addresses the intensifying power demands of the AI-driven computing infrastructure boom. Management projects the ability to deliver over 100 units annually by applying its established modular maintenance framework to power turbine production, a scalability that positions the company at the intersection of two powerful trends: aircraft lifecycle management and data center expansion.

Palantir Partnership: AI-Powered Operational Efficiency

The strategic collaboration with Palantir represents a cornerstone development for FTAI’s operational transformation. Through this multiyear agreement, FTAI gains access to Palantir’s artificial intelligence platform to enable faster production turnaround times and improved unit economics. The AI system digitally models power turbines and predicts maintenance requirements and parts availability with enhanced precision.

This partnership extends beyond FTAI Power to the broader aircraft engine servicing division, allowing the company to optimize its production processes and reduce costs for customers globally. By deploying AI technology to enhance operational efficiency, FTAI strengthens its competitive moat while simultaneously delivering tangible value to its customer base in an increasingly technology-driven landscape.

GE Aerospace Collaboration and Extended Market Runway

Complementing the Palantir relationship is FTAI’s solidified partnership with GE Aerospace through CFM International, a joint venture between GE Aerospace and French aerospace firm Safran. Under a multiyear supply agreement, FTAI secures access to OEM replacement parts, thrust performance upgrades, and component repair capabilities from CFM International.

This arrangement proves particularly valuable given GE Aerospace’s recent announcement that the peak period for major CFM56 engine maintenance visits has been postponed from 2025 to 2027, driven by sustained airline demand. The extended timeline for engine overhauls creates a prolonged window for FTAI to capture aftermarket maintenance revenue while simultaneously developing its power turbine business with stable cash flows supporting growth investments.

Evaluating the Investment: Balancing Valuation Against Growth

Trading at 43 times forward earnings, FTAI Aviation commands a premium valuation that reflects the market’s confidence in its growth trajectory. The high multiple is not irrational given the company’s positioning in two expanding markets: legacy aircraft engine servicing with improved longevity and power generation for data centers facing accelerating electricity demand.

The formation of key partnerships with Palantir and GE Aerospace validates FTAI’s strategic direction and reduces execution risks significantly. These collaborations with industry leaders suggest that future analyst estimates may be revised upward as the company demonstrates operational improvements and capacity expansion. While the current valuation warrants careful consideration, the strengthened partnerships and dual growth engines—aircraft maintenance and power turbines—present a compelling thesis for patient investors willing to ride out market volatility and potential pullbacks.