In this article, we look at the 10 Best Small-Cap Data Center Cooling Stocks to Buy.
Data center cooling has moved from a back-office efficiency issue to one of the core constraints around AI infrastructure. Higher-density GPU servers are pushing more heat into smaller footprints, making conventional air-cooling systems less suitable for the most demanding facilities. ASHRAE’s 2026 AI Data Center Energy Performance Framework points to direct-to-chip cooling, rear-door heat exchangers, and immersion cooling as key thermal approaches for denser AI environments, with direct-to-chip systems supporting warm-water cooling and more hours of economized operation.
The investment case is also being shaped by scale. MarketsandMarkets places the global data center liquid cooling market at $4.07 billion in 2026 and projects it to reach $27.65 billion by 2033, implying a 31.5% compound annual growth rate. Its separate direct-to-chip cooling outlook projects the market to grow from $3.33 billion in 2026 to $17.31 billion by 2032. Strategic activity has followed the same direction, with Ecolab agreeing in March 2026 to acquire CoolIT Systems for about $4.75 billion in cash. The deal underscored how liquid cooling, thermal design, water efficiency, and facility-level energy management are becoming increasingly important parts of the AI data center buildout.
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Methodology
For this article, we screened for U.S.-traded stocks with market caps between $250 million and $2 billion that have explicit exposure to data center cooling, thermal management, or the infrastructure systems that support heat removal in high-density data centers. Since the public small-cap market has few pure-play data center cooling companies, the screen was expanded to include companies operating in clearly related parts of the value chain. We then ranked the stocks by the number of hedge funds holding a stake in them as of Q1 2026 and limited the final selection to companies with recent news or business developments.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. TSS, Inc. (NASDAQ:TSSI)
Number of Hedge Funds: 14
TSS, Inc. (NASDAQ:TSSI) is one of the best small-cap data center cooling stocks to Buy. After a June 4 announcement, TSS management presented at Singular Research’s one-on-one invitational conference on June 15 and at the Planet MicroCap Las Vegas investor conference on June 17, with one-on-one meetings available on June 17 and June 18. The recent investor outreach came as the company’s operating exposure remains closely tied to AI infrastructure deployment.
TSS provides rack and systems integration, procurement, deployment, configuration management, and modular data-center services for advanced computing customers. Its rack integration business specializes in advanced AI and Direct Liquid Cooling technologies, covering assembly, integration, and testing before deployment. The company also said a prior facility expansion would more than triple capacity to test and validate direct liquid-cooled racks, with added power and cooling capacity for rack testing stations. That gives TSS a direct role in the infrastructure layer needed to move liquid-cooled AI systems from design into operating data centers.
TSS, Inc. (NASDAQ:TSSI) provides data-center services, rack and systems integration, procurement, deployment, configuration management, and modular data-center solutions for AI, high-performance computing, and digital infrastructure customers.
9. Graham Corporation (NYSE:GHM)
Number of Hedge Funds: 17
Graham Corporation (NYSE:GHM) is one of the best small-cap data center cooling stocks to Buy. On June 8, Graham reported fiscal fourth-quarter net sales of $67.1 million, up 13%, and full-year net sales of $245.3 million, up 17%. The more relevant point for a data-center cooling screen is not a direct hyperscale contract, but the company’s position in mission-critical fluid and heat-transfer equipment, a layer that sits close to the thermal-management problem as AI facilities move toward higher-density racks, warm-water loops, and more complex heat rejection.
Graham ended fiscal 2026 with a record backlog of $532.6 million, up 29%, and record full-year orders of $359.4 million, giving the business a healthier demand base than a narrow cooling concept stock. Management also said capital spending focused on capability and capacity expansion, automation, productivity improvements, and advanced manufacturing, which is relevant for customized engineered systems. The stock fits the list as a selective thermal-infrastructure play, not as a pure liquid-cooling vendor.
Graham Corporation (NYSE:GHM) designs and manufactures mission-critical fluid, power, heat transfer, vacuum, and advanced mixing technologies for the defense, energy, process, and space markets.
