In this article, we look at the 10 Best Water Infrastructure Stocks to Buy as AI Data Centers Strain Resources.
Artificial intelligence is turning data centers into a major stress test for America’s water systems. The pressure is no longer just about power. It is also about cooling, peak water capacity, wastewater reuse, leak control, metering, pumps, treatment systems, and the local utilities expected to support massive new campuses. A March 2026 study by UC Riverside and Caltech researchers estimated that, if 2024 water-use intensity persists, U.S. data centers could require 697 million to 1.45 billion gallons per day of new water capacity by 2030. The same study put the value of required new water infrastructure at about $10 billion to $58 billion, depending on growth assumptions.
The broader buildout is moving quickly. The U.S. Department of Energy said in December 2024 that data center load growth had tripled over the previous decade and could double or triple again by 2028. Public resistance is also rising, with Reuters reporting in June 2026 that concerns over AI-driven data center expansion now include water use, electricity demand, and local environmental strain. That backdrop is creating a more direct investor case for companies tied to water efficiency, reuse, treatment, flow control, and utility infrastructure.
Methodology
To compile our list, we screened for companies with direct exposure to water treatment, reuse, pumping, flow control, metering, and related infrastructure. We then prioritized stocks with recent business updates, data center exposure, or infrastructure demand tied to cooling. We then ranked stocks based on the number of hedge funds holding stakes in them as of Q1 2026.
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. Mueller Water Products, Inc. (NYSE:MWA)
Number of Hedge Fund Holders: 35
Mueller Water Products, Inc. (NYSE:MWA) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On May 6, 2026, the company’s fiscal second-quarter investor presentation pointed to resilient demand in its core water infrastructure markets, with Water Management Solutions sales rising 12.2% year over year. That segment includes products tied directly to the transmission, distribution, repair, and measurement of water, including hydrants, valves, pipe repair products, pressure management, metering, leak detection, and related software.
The appeal for this theme is Mueller’s role in helping utilities preserve capacity before new demand overwhelms older systems. Its Sentryx Water Intelligence platform provides utilities with data on pressure, flow, leaks, chlorine, and pH, while its EchoShore leak-monitoring technology is designed to detect emerging leaks before they surface in distribution mains. In its February 2026 investor presentation, Mueller said EchoShore had helped clients identify an estimated 7.7 billion gallons of water loss since 2020 and set a goal to identify 18 billion gallons of water loss between 2020 and 2029. That matters as data center growth increases pressure on local water systems, because reducing non-revenue water and prioritizing pipe repair can free up capacity without waiting for entirely new infrastructure.
Mueller Water Products, Inc. manufactures and markets water infrastructure products and solutions, including valves, fire hydrants, pipe connection and repair products, metering products, leak detection, pipe condition assessment, pressure management products, and water intelligence software.
9. Watts Water Technologies, Inc. (NYSE:WTS)
Number of Hedge Fund Holders: 40
Watts Water Technologies, Inc. (NYSE:WTS) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On May 6, 2026, the company reported record first-quarter net sales of $677 million, up 21% year over year and 12% organically. Its May 7 investor presentation said strong data center demand helped offset more challenging markets, while data center demand was also listed as a positive driver in its 2026 outlook.
The update gives Watts a sharper AI infrastructure angle than a generic plumbing supplier story. Data centers need water systems that can manage cooling reliability, leak prevention, flood protection, fire protection, pressure control, drainage, and water quality without risking downtime. Watts markets dedicated data center solutions across process cooling, chilled water systems, air-cooled and liquid-cooled systems, smart monitoring, leak detection, flood prevention, drainage, rainwater harvesting, scale prevention, filtration, and fire sprinkler water supply. Its data center page also says its technologies help reduce facility water consumption and operating costs while protecting against water-based hardware damage.
Watts Water Technologies, Inc. provides water quality, flow control, drainage, HVAC, hot water, backflow prevention, fire protection, leak detection, and smart water-management solutions for commercial, residential, industrial, and institutional customers.
8. Advanced Drainage Systems, Inc. (NYSE:WMS)
Number of Hedge Fund Holders: 46
Advanced Drainage Systems, Inc. (NYSE:WMS) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On May 21, 2026, the company reported fourth-quarter fiscal 2026 net sales of $676.8 million, up 9.9% year over year, with stormwater sales rising 11.7% to $534.7 million. Management said the company remains focused on gaining share in growing construction segments, specifically naming data centers as one of the markets supporting its long-term strategy.
ADS is not a liquid-cooling supplier, but data center campuses still require major site-water infrastructure before they can operate, including stormwater drainage, runoff control, underground conveyance, wastewater systems, and rainwater management. The company’s February 2026 acquisition of National Diversified Sales also expanded its water management offering and added $48.8 million of stormwater revenue in the fourth quarter. For fiscal 2026, ADS generated $3.05 billion in net sales, up 5%, while wastewater sales increased 13% to $653.0 million. Its fiscal 2027 outlook calls for net sales of $3.35 billion to $3.55 billion, suggesting continued demand for stormwater and wastewater infrastructure.
Advanced Drainage Systems, Inc. provides stormwater drainage, onsite wastewater, rainwater management, pipe, chambers, basins, and related water-management solutions for commercial, residential, infrastructure, agricultural, and industrial markets.
7. Tetra Tech, Inc. (NASDAQ:TTEK)
Number of Hedge Fund Holders: 46
Tetra Tech, Inc. (NASDAQ:TTEK) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On June 15, 2026, the company said Scotland Excel selected it for all nine service lots under a four-year engineering and technical consultancy framework. The contract covers support for local councils across Scotland, including drainage and flooding, coastal and maritime, transportation, and master planning projects.
The award gives Tetra Tech a fresh infrastructure story tied to the broader pressure on water systems, flood resilience, and public-sector planning. That is relevant to the AI data center theme because new facilities are increasingly running into the same constraint set: water availability, environmental permitting, local infrastructure capacity, and community resistance. Tetra Tech made that connection directly on April 29, 2026, when CEO Roger Argus said the company’s high-end consulting services for water supplies and environmental impact mitigation are becoming increasingly critical to gaining community support for data center projects.
Tetra Tech, Inc. provides consulting, engineering, program management, water, environment, and sustainable infrastructure services for public and private-sector clients worldwide.
6. Pentair plc (NYSE:PNR)
Number of Hedge Fund Holders: 46
Pentair plc (NYSE:PNR) is one of the best water infrastructure stocks to buy as AI data centers strain resources. The company’s clearest angle is its Aurora pump portfolio, which is used in data center cooling and water circulation systems. Pentair markets Aurora pumps for hyperscale and edge facilities, including chilled water loops, condenser water systems, liquid cooling, rear-door heat exchangers, in-row cooling, geothermal, and hybrid cooling setups. Its data center pump materials also highlight liquid cooling pumps, booster pumps, chilled water pumps, condenser water pumps, domestic water pressure boosting, and fire suppression pumps, giving the company exposure across multiple water-dependent systems inside mission-critical campuses.
The financial setup supports the infrastructure case. On April 28, 2026, Pentair reported first-quarter sales of $1.04 billion, up 3% year over year, while adjusted EPS rose 10% to $1.22. The Flow segment, which houses much of the company’s pump exposure, posted 11% sales growth and 22% segment income growth. Pentair also updated its 2026 adjusted EPS outlook to $5.30 to $5.40, implying 8% to 10% growth from the prior year.
Pentair plc (NYSE:PNR) provides water treatment, flow, pump, filtration, pool, and related water-management solutions for residential, commercial, industrial, municipal, infrastructure, and agricultural markets.
5. Xylem Inc. (NYSE:XYL)
Number of Hedge Fund Holders: 46
Xylem Inc. (NYSE:XYL) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On June 8, 2026, the company expanded its long-term partnership with Dow to design, build, and operate advanced water systems at Dow’s large-scale industrial complex in Fort Saskatchewan, Alberta. The project will support Dow’s Path2Zero operations and is expected to be operational by August 2028.
The agreement gives Xylem a fresh example of the kind of integrated water-management work that becomes more important as industrial and digital infrastructure strain local water supplies. Xylem will deliver engineering, system design, and long-term operation for a full water-cycle system that treats raw water, converts cooling and industrial process water into high-quality reusable supply, and optimizes system performance over time. That directly supports the broader AI infrastructure theme because water reuse, treatment, and real-time system management are becoming central to avoiding competition between industrial growth and community water needs.
Xylem Inc. provides water technology, treatment, pumping, analytics, metering, wastewater, reuse, and digital infrastructure solutions for utilities, commercial customers, industrial facilities, and communities worldwide.
4. Core & Main, Inc. (NYSE:CNM)
Number of Hedge Fund Holders: 55
Core & Main, Inc. is one of the best water infrastructure stocks to buy as AI data centers strain resources. On June 10, 2026, the company reported fiscal first-quarter net sales of $1.91 billion and reaffirmed its full-year fiscal 2026 net sales outlook of $7.8 billion to $7.9 billion. Management said municipal demand remained healthy, supported by repair-and-replace activity and infrastructure investment, while treatment plant solutions grew at a double-digit rate and smart utility products posted high-single-digit growth.
The update is relevant to the AI data center theme because Core & Main sits in the distribution layer of water infrastructure. During the same earnings call, management said the company continued to see strong sales volumes in data center construction. Those projects require water, wastewater, storm drainage, meter, fire protection, pipe, valve, fitting, and treatment plant products before campuses can scale. Core & Main’s role as a specialty distributor also gives it exposure to fragmented local infrastructure work, where utilities and contractors need supply-chain depth, branch coverage, and product expertise to support both aging systems and new load from large industrial projects.
Core & Main, Inc. distributes water, wastewater, storm drainage, fire protection, meter, treatment plant, and related infrastructure products to municipalities, private water companies, and contractors across municipal, non-residential, and residential markets.
3. Veralto Corporation (NYSE:VLTO)
Number of Hedge Fund Holders: 57
Veralto Corporation (NYSE:VLTO) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On May 18, 2026, ChemTreat, a Veralto operating company, joined Dow’s newly launched Coolant Care Network as a strategic national service provider for AI data center cooling and as Dow’s only preferred service provider in Virginia.
The collaboration gives Veralto a direct role in the liquid-cooling shift taking place inside high-density AI data centers. Dow’s Coolant Care Network coordinates fluid supply, testing, data analysis, and field support, while ChemTreat provides sampling, mitigation, fluid health optimization, specialized chemistries, and remote monitoring. ChemTreat also added Dow’s DOWFROST LC and DOWFROST HD heat transfer fluids to its portfolio for direct-to-chip cooling loops and facility loops. For investors, the angle is that Veralto is not just exposed to water quality in municipal systems; through ChemTreat, it is also positioned inside the operating reliability layer of AI data center cooling, where water chemistry, corrosion control, fluid performance, and uptime become more important as workloads become denser.
Veralto Corporation provides water quality and product quality solutions through brands including ChemTreat, Hach, Trojan Technologies, McCrometer, OTT HydroMet, Aquatic Informatics, Esko, Linx, Videojet, and X-Rite.
2. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 60
Ecolab Inc. (NYSE:ECL) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On June 1, 2026, CoolIT Systems announced that it had developed a 15kW coldplate design for single-phase direct liquid cooling, delivering nearly four times the capacity of its previously demonstrated coldplate and extending its roadmap for future ultra-high-density AI infrastructure.
The update is relevant to Ecolab because the company agreed on March 20, 2026, to acquire CoolIT Systems for approximately $4.75 billion in cash. CoolIT’s 15kW coldplate was validated using a standard water-glycol coolant at 1.2 liters per minute per kilowatt, with system-level performance suitable for 45°C warm-water cooling environments. That ties directly into the water-efficiency side of AI infrastructure, since higher-density GPUs and accelerators are pushing data centers toward liquid cooling systems that move heat through engineered fluid loops instead of relying only on traditional air cooling.
Ecolab Inc. provides water, hygiene, infection prevention, digital monitoring, water treatment, chemistry, and operational efficiency solutions for customers across industrial, institutional, healthcare, life sciences, microelectronics, food, hospitality, data center, and power markets.
1. Ferguson Enterprises Inc. (NYSE:FERG)
Number of Hedge Fund Holders: 85
Ferguson Enterprises Inc. (NYSE:FERG) is one of the best water infrastructure stocks to buy as AI data centers strain resources. On May 5, 2026, Ferguson reported first-quarter sales of $7.5 billion, up 3.6% year over year, while U.S. non-residential revenue rose 8%. Management said large capital project activity remained strong, with growth in shipments, open orders, and bidding activity.
The data center angle is unusually direct for a distributor. During the same earnings call, CFO Bill Brundage said data centers accounted for a little over half of Ferguson’s large capital project revenue. He also said large capital projects showed up principally in commercial mechanical, which grew 21%, and in part of Waterworks, which grew 14%.
This is important because large AI data center campuses require coordinated waterworks, mechanical, HVAC, plumbing, PVF, valve, flow-control, wastewater, and fire-protection supply before they can operate at scale. Ferguson also completed two Waterworks acquisitions during the quarter: Technology Sales Associates and Chesapeake Environmental Equipment.
Ferguson Enterprises Inc. is a North American distributor of water, air, plumbing, HVAC, PVF, waterworks, wastewater, and related infrastructure products.
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