In this article, we will take a look at the 12 Best HVAC Stocks to Buy Now.
As cloud computing, AI, and high-performance workloads keep growing, some parts of the data center that used to be taken for granted are now getting serious attention. Cooling is one of them. A new report from Morgan Lewis makes it clear that the data center buildout is forcing investors to rethink what really matters in infrastructure. Heating, ventilation, and air conditioning (HVAC) and thermal management are no longer just line items in a construction budget. They are starting to shape where data centers are located, how much they cost to run, how sustainable they are, and how valuable they can be over the long run.
That same shift showed up earlier this year in a CNBC report. Demand for portable air conditioners has been rising, but more importantly, HVAC companies focused on building technologies are seeing stronger interest from data centers, hospitals, factories, and commercial real estate owners. The spread of AI is a big driver here, as more computing power means more heat and far less room for inefficient systems.
Katie McGinty of Johnson Controls has framed this moment as a turning point for the industry. As AI adoption speeds up, the need for smarter, more efficient cooling becomes unavoidable, pushing HVAC into a central role in digital transformation. She has also pointed out that this surge in demand gives businesses a chance to lower operating costs while staying aligned with environmental goals. One trend she highlighted as gaining real traction is heat pumps, which are quickly becoming a major focus across the HVAC space.
Given this, we will take a look at some of the best HVAC stocks to invest in.
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Our Methodology:
For this article, we scanned the holdings of the AdvisorShares HVAC and Industrials ETF, an actively managed exchange-traded fund designed to give investors exposure to US companies tied to the heating, ventilation, and air conditioning (HVAC) industry and the broader industrial sector. From its holdings, we identified 12 companies that were most popular among hedge fund investors, according to Insider Monkey’s Q3 2025 database.
The companies listed below are not all pure-play HVAC businesses, but each has meaningful exposure to HVAC activities, whether through core operations or related segments.
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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. Graham Corporation (NYSE:GHM)
Number of Hedge Fund Holders: 16
On January 27, Northland downgraded Graham Corporation (NYSE:GHM) to Market Perform from Outperform and raised its price target to $80 from $71. The firm remains constructive on Graham’s acquisition of FlackTek, which produces proprietary material processing solutions. Still, the analyst said the stock now appears close to full value. That view is reinforced by management’s indication that orders could slow to around $50M in the second half of 2026, down sharply from $209M in the first half. Taken together, the analyst said, “a better entry could emerge.”
A day earlier, on January 26, the company announced it had acquired FlackTek Manufacturing, LLC and FlackTek Sales, LLC, together known as FlackTek. FlackTek is widely regarded as a pioneer in advanced mixing and material processing solutions.
Under the terms of the deal, Graham acquired 100% of FlackTek’s equity for $35 million. The payment consisted of 85% cash and 15% in equity, issued through 75,818 shares of Graham’s common stock. The agreement also includes the potential for up to $25 million in additional performance-based cash earnouts over four years starting in fiscal 2027. These earnouts are tied to progressively higher adjusted EBITDA targets. The base purchase price reflects roughly 12x FlackTek’s projected adjusted EBITDA for 2026.
Management believes the FlackTek acquisition meaningfully broadens Graham’s ability to address complex customer needs. Many of these challenges now require integrated solutions that cut across rotating machinery, vacuum environments, thermal management, and advanced materials processing.
Graham Corporation (NYSE:GHM) operates as a global leader in the design and manufacture of mission-critical fluid, power, heat transfer, and vacuum technologies. Its products serve customers across the Defense, Energy & Process, and Space industries.
11. Willdan Group, Inc. (NASDAQ:WLDN)
Number of Hedge Fund Holders: 30
On January 15, Wedbush raised its price recommendation on Willdan Group, Inc. (NASDAQ:WLDN) to $145 from $120. It maintained an Outperform rating on the stock. The firm pointed to a steady flow of growth opportunities as state and local governments, utilities, and commercial customers push to improve efficiency through new energy deployments and expanded infrastructure projects. Wedbush said these trends are increasingly playing to Willdan’s strengths.
Earlier in the month, on January 2, Willdan announced that it had completed its previously disclosed acquisition of Compass Municipal Advisors, LLC through its subsidiary, Willdan Financial Services. Compass is an independent municipal advisory firm based in the Southeastern US, though financial terms of the deal were not shared. Management expects the addition of Compass to broaden Willdan’s geographic reach and strengthen its municipal advisory and public finance offerings for clients.
Willdan Group, Inc. (NASDAQ:WLDN) provides professional, technical, and consulting services to utilities, government entities, and private-sector customers. Its operations are organized across two main segments: Energy and Engineering and Consulting.
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