11 Hidden AI Stocks to Buy Right Now

9. Modine Manufacturing Co. (NYSE:MOD)

Number of Hedge Fund Holders: 43

Modine Manufacturing Co. (NYSE:MOD) provides thermal management products and solutions. It operates through Climate Solutions and Performance Technologies segments. The company also provides data center products consisting of IT cooling solutions, such as precision air conditioning units for data center applications.

The surge in demand for HPC due to AI/ML applications increases the need for cooling solutions for data centers. Modine’s expertise in this area positions it as a leading data center cooling business. In FQ3 2025, Modine’s data center revenues grew by 176% year-over-year. This was partly fueled by the acquisition of Scott Springfield, which contributed $63 million to this data center revenue.

The company recently also secured a $180 million order from a leading AI infrastructure developer for its specialized Airedale by Modine data center cooling systems. On March 31, DA Davidson reiterated a Buy rating on the stock but lowered the price target to $140 from $155. Modine Manufacturing Co. (NYSE:MOD) now projects to grow data center sales by 110% to 120% for the full FY2025.

SouthernSun Small Cap Strategy highlighted  Modine’s positive turnaround driven by new CEO Neil Brinker’s strategic shift towards HVAC and stated the following regarding Modine Manufacturing Company (NYSE:MOD) in its Q1 2025 investor letter:

“Modine Manufacturing Company (NYSE:MOD) is an over 100-year-old thermal management company based in Racine, WI. The company started out producing heat exchangers for tractors but quickly expanded into the automotive market and became a major supplier of heat exchangers to leading car manufacturers. As demand for automobiles increased significantly throughout the 20th century, Modine expanded operations globally. However, as the automotive market matured and became more competitive, MOD’s growth slowed, and the company went through numerous restructurings to take cost out of the business. The company attempted to diversify into the HVAC industry by buying Airedale in 2005 and Luvata in 2016, but management lacked a clear strategic vision, and the legacy automotive business continued to attract most of the time and resources.

In December 2020, MOD’s board decided new leadership was needed and hired Neil Brinker as CEO. Brinker was previously COO at Advanced Energy (AEIS) and had experience working at Idex Corporation (IEX) and Danaher (DANH) – both high performing industrials (we have been owners of AEIS and IEX and think highly of their business culture). After assessing the business, Brinker decided the company needed to move away from its legacy automotive parts businesses and shift resources into HVAC. He quickly implemented operational changes including reorganizing the business into 6 business units, hiring new general managers, implementing 80/20, and divesting low growth, low-margin automotive businesses. The changes yielded quick results with Adjusted EBITDA rising roughly 80% over three years…” (Click here to read the full text)