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.
10. Rockwell Automation, Inc. (NYSE:ROK)
Number of Hedge Fund Holders: 51
On January 20, Oppenheimer analyst Noah Kaye downgraded Rockwell Automation, Inc. (NYSE:ROK) to Perform from Outperform. The firm pointed to Rockwell’s steady progress on operational excellence initiatives. The company has delivered meaningful margin expansion despite weak end markets and has outlined a technology roadmap that supports continued share gains.
At the same time, Oppenheimer believes much of that progress may already be reflected in the stock. Expectations for an eventual pickup in manufacturing activity appear priced in, with shares trading near record valuation levels. Based on leading industrial indicators, the firm expects only modest sequential improvement in orders over the next few quarters, rather than a sharp acceleration.
On January 21, Rockwell announced a deepened collaboration with Lucid, the maker of the world’s most advanced electric vehicles. The partnership supports Lucid’s expanding manufacturing facility in the Kingdom of Saudi Arabia. Located in King Abdullah Economic City (KAEC), the site represents the country’s first vehicle manufacturing facility.
Under the agreement, Lucid will deploy Rockwell Automation’s enterprise software solutions, including its FactoryTalk® manufacturing execution system (MES). The platform will be used to manage and optimize production across general assembly, paint, stamping, body, and powertrain operations. FactoryTalk MES will give Lucid real-time visibility, traceability, and control, supporting production of the company’s future midsize vehicles.
The collaboration also focuses on workforce development. Through tailored training programs, local Saudi talent will gain hands-on experience with advanced EV manufacturing technologies. Rockwell said this approach is designed to build a skilled workforce, support long-term industrial growth, and contribute to the Kingdom’s Vision 2030 goals.
Rockwell Automation, Inc. (NYSE:ROK) operates as a global provider of industrial automation and digital transformation solutions. The company reports through three segments: Intelligent Devices, Software & Control, and Lifecycle Services.
9. BWX Technologies, Inc. (NYSE:BWXT)
Number of Hedge Fund Holders: 54
On January 15, BNP Paribas initiated coverage of BWX Technologies, Inc. (NYSE:BWXT) with a Neutral rating and a $215 price target. Analyst Matthew Akers said the company offers a compelling mix of defense exposure and longer-term commercial nuclear optionality, but much of that appeal already appears reflected in the stock. “BWXT has an attractive defense business with commercial nuclear optionality, but this looks priced in with margin upside more of a 2027+ opportunity,” Akers wrote in a research note dated January 14. He added that BNP Paribas sees limited near-term total shareholder return at current valuation levels.
The firm also expects margins in BWXT’s government operations segment to remain under pressure in the near term. Akers pointed out that margins have fallen by roughly 150 basis points since 2021, largely due to inflation working its way through long-term contracts and a higher mix of lower-margin development programs, including microreactors and space nuclear propulsion initiatives.
On January 26, BWXT announced the opening of its Centrifuge Manufacturing Development Facility in Oak Ridge. The new site represents a significant step in the company’s effort to rebuild a fully domestic uranium enrichment capability aligned with US national security priorities. Last September, the National Nuclear Security Administration awarded BWXT a $1.5 billion contract to support a broad program aimed at securing a reliable supply of enriched uranium for defense-related fuel needs. The CMDF plays a central role in that initiative.
The facility will serve as BWXT’s main center for the design, engineering, fabrication, and testing of advanced gas centrifuge machines. It includes precision manufacturing space, in-house quality and testing capabilities, and specialized infrastructure designed to support future centrifuge production. Management said the CMDF will help move centrifuge technology from development toward production readiness while supporting broader goals tied to energy security, defense preparedness, and advanced manufacturing.
BWX Technologies, Inc. (NYSE:BWXT) operates as a specialty manufacturer of nuclear components, a developer of advanced nuclear technologies, and a provider of related services. The company is also involved in special nuclear materials processing, environmental site restoration, and a range of nuclear-focused products and services.
8. Jabil Inc. (NYSE:JBL)
Number of Hedge Fund Holders: 54
On January 15, Goldman Sachs raised its price target on Jabil Inc. (NYSE:JBL) to $282 from $255 and reiterated its Buy rating. The firm said the revision reflects sustained strength in data center demand, which continues to drive upside in Jabil’s outlook.
Earlier in the month, Jabil confirmed it had closed the acquisition of Hanley Energy Group, a specialist in energy management and critical power systems for data center infrastructure. The transaction was finalized on January 2, 2026, and valued at roughly $725 million in cash, with an additional earnout of up to $58 million tied to future revenue targets. TM Capital acted as Hanley’s exclusive financial advisor, while UBS Investment Bank advised Jabil.
Jabil executives framed the deal as a strategic fit. Matt Crowley, Executive Vice President of Global Business Units for Intelligent Infrastructure, said Hanley’s expertise in power systems and energy optimization complements Jabil’s existing data center offerings and strengthens its ability to deliver solutions all the way down to the rack level.
Ed Bailey, Senior Vice President and Chief Technology Officer for Intelligent Infrastructure, pointed to the rising importance of power management as hyperscalers ramp up AI deployments. He said the addition of Hanley, alongside Jabil’s growing thermal management capabilities, supports the company’s push to offer customized solutions across the full data center lifecycle.
Jabil Inc. (NYSE:JBL) provides engineering, manufacturing, and supply chain solutions to customers across a wide range of industries, supporting electronics design, production, and product management in multiple end markets.
7. Parker-Hannifin Corporation (NYSE:PH)
Number of Hedge Fund Holders: 57
On January 30, Truist lifted its price target on Parker-Hannifin Corporation (NYSE:PH) to $1,139 from $1,097 and reiterated its Buy rating. The analyst pointed to the company’s second-quarter earnings beat and said margin performance remains a clear strength, according to the research note shared with investors.
A day earlier, on January 29, Parker raised its full-year profit outlook, citing strong demand in aerospace and steady growth in its filtration business as customers place more emphasis on cleaner air and water solutions. The company’s $9.25 billion acquisition of Filtration Group also deepened its exposure to the aftermarket, a segment that tends to generate recurring, higher-margin revenue through replacement parts and ongoing maintenance after the initial equipment sale.
CEO Jenny Parmentier said the company was increasing its guidance “on the strength of robust aerospace demand and a continued gradual recovery in our industrial markets.” Parker now expects adjusted profit for 2026 to range between $30.40 and $31.00 per share, up from its prior outlook of $29.60 to $30.40 per share.
For the quarter ended December 31, Parker reported revenue of $5.17 billion, compared with $4.74 billion in the same period last year. Aerospace systems stood out, with segment sales climbing 14.5% to $1.71 billion.
Parker-Hannifin Corporation (NYSE:PH) focuses on motion and control technologies, designing and manufacturing highly engineered systems while also providing aftermarket support across a wide range of industrial and aerospace applications.
6. Trane Technologies plc (NYSE:TT)
Number of Hedge Fund Holders: 58
On January 30, Oppenheimer analyst Noah Kaye raised the firm’s price objective on Trane Technologies plc (NYSE:TT) to $468 from $460 and maintained an Outperform rating. Shares moved higher the same day after the company delivered a fourth-quarter beat on both revenue and earnings. The firm also highlighted strong enterprise bookings and FY26 EPS guidance that came in line, supported by higher expected sales.
A day earlier, on January 29, Trane reported fourth-quarter results that exceeded Wall Street expectations. Results were driven by solid commercial HVAC demand, with AI data centers playing a growing role. Revenue increased 6% year over year to $5.15 billion, topping the $5.09 billion consensus estimate. Adjusted earnings from continuing operations came in at $2.86 per share, above expectations of $2.81. Net income rose to $624 million, or $2.74 per share, compared with $607 million, or $2.67 per share, a year earlier.
Bookings were a standout. Trane said total bookings climbed 24% to $5.76 billion, with organic bookings up 22%. Backlog reached a record $7.8 billion, up 15% from the end of 2024. Growth was led by Americas Commercial HVAC, which the company said rose more than 35%.
In the Americas segment, bookings totaled $4.65 billion, up 27%, with organic bookings increasing 26%. Management said momentum was strongest in commercial HVAC, where applied equipment bookings jumped more than 120%. The applied book-to-bill ratio reached 200%, a level that points to continued strength in demand.
Trane Technologies plc (NYSE:TT) operates as a global climate innovator. Through brands such as Trane and Thermo King, the company provides climate solutions for buildings, homes, and transportation across a wide range of markets.
5. APi Group Corporation (NYSE:APG)
Number of Hedge Fund Holders: 58
On January 21, Truist raised its price target on APi Group Corporation (NYSE:APG) to $50 from $41 and reaffirmed its Buy rating. The firm said it continues to view the facility services space favorably heading into 2026, describing the sector as “largely insulated” from broader macro swings and AI-related shifts in the labor market. In its note to investors, Truist named APi Group its top pick in the sector for 2026, pointing to “strong” project demand and further upside to Street estimates as multiples expand. The firm also noted that APi shares still trade at a discount compared with recent private equity deals involving fire safety businesses.
More recently, on February 2, APi announced that it had completed its previously disclosed acquisition of CertaSite, an inspection-first provider of fire and life safety services operating across the Midwest. Management said the deal strengthens APi’s standing as a leading safety services provider with a focus on non-discretionary, regulatory-driven, and recurring revenue streams. CertaSite is expected to be accretive to APi’s “10/16/60+” shareholder value creation framework, supported by its inspection-led model, strong EBITDA margins, and asset-light structure.
APi Group Corporation (NYSE:APG) operates as a global leader in business services, offering fire and life safety, security, elevator and escalator, and specialty services through a network of more than 500 locations worldwide. The company generates a substantial portion of its revenue from recurring, statutorily mandated, and contracted services, serving a long-standing and diversified customer base across multiple industries.
4. Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Holders: 67
On February 2, UBS raised its price recommendation on Comfort Systems USA, Inc. (NYSE:FIX) to $1,310 from $1,140. The firm also reiterated its Buy rating on the stock. The firm expects a strong fourth-quarter performance, supported by management’s confident tone and an anticipated backlog in the $10.5B–$10.7B range. While UBS does not expect a formal increase to guidance, it noted the stock could face near-term pressure if backlog comes in below expectations. Even so, the firm remains constructive in the long term, citing structural labor shortages and potential upside to earnings estimates.
Comfort Systems USA has long been active in the data center market and has grown into one of the industry’s leading HVAC providers. Demand remains robust, with backlog reaching $9.38 billion, up roughly 65% year over year, underscoring the scale of ongoing project activity.
The company has also been expanding through acquisitions as investment tied to AI infrastructure accelerates. Recent purchases of electrical contractors in Western Michigan and Southern Florida are expected to add about $200 million in annual revenue. Management believes these acquisitions will strengthen its market position and pricing power as AI-related construction continues to ramp.
That growth has begun to flow through to shareholder returns. While the stock currently yields around 0.24%, Comfort Systems USA increased its dividend by 20% last year. Such an increase reflects a strong balance sheet and solid financial momentum, and similar dividend growth could become more common if current trends persist.
Comfort Systems USA, Inc. (NYSE:FIX) provides commercial, industrial, and institutional HVAC and electrical contracting services, supporting a wide range of complex facilities across the US.
3. Ferguson Enterprises Inc. (NYSE:FERG)
Number of Hedge Fund Holders: 87
On January 15, Barclays analyst Matthew Bouley raised his price target on Ferguson Enterprises Inc. (NYSE:FERG) to $278 from $267 and reiterated an Overweight rating on the stock. The update came as Barclays refreshed its targets across the homebuilding and building products space ahead of fourth-quarter earnings.
In his note to investors, Bouley said builders continue to face margin pressure as demand remains “choppy” and inventory levels stay elevated. He also pointed to government policy as a mixed factor, “driving potential negatives and positives together,” which adds another layer of uncertainty for the sector. Against that backdrop, Barclays said it is staying selective within building products as companies head into Q4 reporting.
During the company’s third-quarter 2025 earnings call, CEO Kevin Murphy said Ferguson continued to execute its growth strategy well despite a difficult market backdrop. He reported sales of $8.2 billion, representing a 5% increase from the prior year. According to Murphy, organic growth accounted for 4% of that increase, while acquisitions contributed another 1%. He also pointed to gross margin expansion to 30.7%.
Murphy said operating profit rose 14% year over year to $808 million, while diluted earnings per share increased nearly 16% to $2.84. He highlighted recent capital allocation actions, noting,
“We declared a 7% increase to our quarterly dividend to $0.89 per share, and we acquired Moore Supply Company, HVAC equipment and supplies business in the Chicago metro area.”
Turning to end markets, Murphy said residential conditions remain under pressure, with residential revenue down 1%. In contrast, nonresidential revenue grew 12%. He noted that U.S. Waterworks revenue increased 14%, while HVAC revenue declined 6%, which he attributed to industry transitions and continued weakness in residential construction.
Ferguson Enterprises Inc. (NYSE:FERG) operates as a value-added distributor, supplying specialized products and services to professional customers across both residential and non-residential construction markets in North America.
2. Amphenol Corporation (NYSE:APH)
Number of Hedge Fund Holders: 89
On January 29, Barclays analyst Guy Hardwick lifted his price recommendation on Amphenol Corporation (NYSE:APH) to $175 from $156. The analyst also reiterated an Overweight rating following the company’s fourth-quarter results. In a note to investors, Hardwick said the recent pullback in the shares, triggered by a first-quarter sales outlook that came in below consensus, has created an attractive entry point. He highlighted Amphenol’s broad-based growth across end markets and pointed to a record order backlog of $8.4B as evidence of underlying demand.
Earlier in the month, on January 12, Amphenol completed its previously announced acquisition of CommScope’s Connectivity and Cable Solutions business. The company expects the acquired unit to generate about $4.1 billion in sales in full-year 2026. Following the close, the deal is projected to add roughly $0.15 to Amphenol’s 2026 diluted earnings per share, excluding acquisition-related costs. The CCS business will be reported within Amphenol’s Communications Solutions segment. Amphenol President and Chief Executive Officer, R. Adam Norwitt, made the following comment:
“The acquisition of the CCS business adds significant fiber optic interconnect capabilities for the IT datacom and communications networks markets as well as a diverse range of industrial interconnect products for the building infrastructure connectivity market. We are excited to welcome the approximately 20,000 talented CCS employees to the Amphenol family and look forward to further supporting our customers who are developing next-generation products in the IT datacom, communications networks and industrial markets around the world.”
Amphenol Corporation (NYSE:APH) ranks among the world’s largest suppliers of connectors and interconnect systems, designing and manufacturing a wide range of electrical, electronic, and fiber optic products. Its portfolio also includes antennas, sensors, and high-speed specialty cable solutions serving diverse global markets.
1. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 102
Vertiv Holdings Co (NYSE:VRT)’s liquid-cooling solutions sit at the center of modern AI infrastructure. Without effective cooling, high-performance AI chips would overheat quickly and fail to operate as intended. Vertiv is not the only provider in this space, but it stands out as one of the few companies focused almost entirely on AI infrastructure, with a direct partnership with Nvidia.
That partnership carries weight. Working directly with Nvidia gives Vertiv early visibility into upcoming AI chips and the ability to align its cooling technology with new designs. When Nvidia launches a new chip, it is effectively signaling that Vertiv’s systems are capable of keeping that hardware running under intense workloads.
Speed matters in the AI industry. Many technology companies are willing to pay more for solutions that are proven and ready to deploy. Vertiv benefits from being a pre-certified vendor for AI infrastructure, making it an easy choice for customers who prefer reliability over cost savings tied to untested alternatives.
The financial impact of this position showed up clearly in Vertiv’s Q3 2025 results. Organic orders rose 60% year over year, and management raised full-year guidance for net sales and other key metrics. In its third-quarter earnings presentation, Vertiv said it expects AI infrastructure deployment in EMEA to “accelerate in 2026.”
That outlook is easier to accept given the momentum already in place. The company’s relationship with Nvidia could also help it capture additional share in the EMEA region as deployments pick up next year. If that plays out, Vertiv adds another high-growth avenue that can support long-term returns.
Vertiv Holdings Co (NYSE:VRT) provides critical digital infrastructure technologies and lifecycle services. Its offerings support data centers, communication networks, and a range of commercial and industrial environments worldwide.
While we acknowledge the potential of VRT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than VRT and that has 100x upside potential, check out our report about this cheapest AI stock.
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