In this article, we will discuss the 5 Best HVAC Stocks to Buy for AI Server Heat Mitigation. For deeper discussion and analysis, read 7 Best HVAC Stocks to Buy for AI Server Heat Mitigation.
5. Xylem Inc. (NYSE:XYL)
Short Percentage of Shares Outstanding: 3.44%
On June 25, Jefferies upgraded Xylem Inc. (NYSE:XYL) to Buy from Hold and raised its price target to $140 from $130. The firm noted that the stock has underperformed the broader industrial sector despite stable demand trends and improving margins. Jefferies believes that while industrial companies with direct exposure to data centers have experienced significant valuation expansion, Xylem has yet to fully reflect improving cyclical conditions. The firm also highlighted the company’s broad exposure across the entire water value chain and its recurring revenue base supported by long-term utility spending.
On June 8, Xylem Inc. (NYSE:XYL) announced a landmark agreement with Dow (DOW) to design, build, and operate advanced water systems at Dow’s large-scale industrial complex in Fort Saskatchewan, Alberta, Canada. The agreement expands the companies’ longstanding partnership and supports increased operations associated with Dow’s Path2Zero project. Under the contract, Xylem will provide a comprehensive solution encompassing engineering, system design, and long-term operations to ensure a reliable water supply, treatment, and reuse across the facility. The system is expected to become operational by August 2028.
Founded in 2011 and headquartered in Washington, D.C., Xylem Inc. (NYSE:XYL) is a global water technology company that designs, manufactures, and services equipment for water and wastewater applications. It provides high-efficiency pumps, heat exchangers, and closed-loop liquid cooling systems required to safely dissipate the extreme heat loads generated by dense AI servers in data centers.
4. Comfort Systems USA, Inc. (NYSE:FIX)
Short Percentage of Shares Outstanding: 2.34%
On May 28, Oppenheimer initiated coverage of Comfort Systems USA, Inc. (NYSE:FIX) with an Outperform rating and a $2,200 price target, citing the company’s strong positioning to capitalize on growing demand for increasingly complex commercial and industrial facilities. The firm believes Comfort Systems is uniquely equipped to deliver the sophisticated mechanical and electrical infrastructure required for large-scale projects and expects the company to sustain, or potentially exceed, its recent pace of earnings growth. According to Oppenheimer, the company’s operational capabilities and exposure to attractive end markets create a favorable backdrop for continued long-term expansion.
On June 8, UBS raised its price target on Comfort Systems USA, Inc. (NYSE:FIX) to $2,125 from $1,992 and maintained a Buy rating following meetings with management. According to the firm, management commentary indicated that demand remains exceptionally strong, particularly from data center projects, while additional opportunities continue to emerge across semiconductor, healthcare, and education markets. UBS believes the favorable business environment currently supporting the company is likely to persist through at least 2027.
Founded in 1917 and headquartered in Houston, Texas, Comfort Systems USA, Inc. (NYSE:FIX) provides comprehensive mechanical and electrical contracting services, including HVAC, plumbing, and modular construction. The company benefits from the AI boom by constructing the vital mechanical infrastructure and cooling systems required to mitigate the intense heat generated by AI servers in massive data centers.
3. Carrier Global Corporation (NYSE:CARR)
Short Percentage of Shares Outstanding: 2.04%
On June 9, Bernstein initiated coverage of Carrier Global Corporation (NYSE:CARR) with a Market Perform rating and a $75 price target. The firm stated that the shares appear fairly valued at current levels, noting that growing demand from data centers is expected to offset weakness in the residential market in the near term. However, Bernstein also highlighted that the industry’s gradual transition toward liquid cooling technologies could affect Carrier’s long-term revenue outlook, as lower chiller intensity may reduce demand for certain traditional cooling solutions.
On May 28, Morgan Stanley raised its price target on Carrier Global Corporation (NYSE:CARR) to $60 from $55 while maintaining an Equal Weight rating on the shares. The revision followed the company’s recent earnings report and reflected updated expectations for its operating performance and financial outlook.
Founded in 1915 and headquartered in Palm Beach Gardens, Florida, Carrier Global Corporation (NYSE:CARR) manufactures and distributes intelligent HVAC, refrigeration, and energy solutions. The company is heavily involved in AI server heat mitigation by leveraging advanced Coolant Distribution Units (CDU) and backing direct-to-chip liquid cooling innovators like ZutaCore to manage the intense thermal loads of high-density AI data centers.
2. Trane Technologies plc (NYSE:TT)
Short Percentage of Shares Outstanding: 1.75%
On June 10, Trane Technologies plc (NYSE:TT) disclosed in a regulatory filing that its Board of Directors appointed Donald Simmons as Executive Vice President and Chief Operating Officer, effective July 1, 2026. Simmons has served as Group President, Americas, since January 2024 and previously held several senior leadership positions within the company, including Americas Segment Leader and President of Commercial HVAC Americas. The appointment reflects Trane’s continued focus on leadership development and operational execution as it advances its long-term growth strategy.
On May 14, JPMorgan raised its price target on Trane Technologies plc (NYSE:TT) to $475 from $460 while maintaining a Neutral rating on the shares. The firm updated its financial model following the company’s first-quarter earnings report, reflecting revised expectations for Trane’s operating performance and outlook.
Founded in 1885 and headquartered in Swords, Ireland, Trane Technologies plc (NYSE:TT) is a global climate innovator that designs high-efficiency HVAC and transport refrigeration solutions. It capitalizes on the AI boom by manufacturing massive chillers and liquid cooling infrastructure essential to dissipating the extreme heat generated by dense data center servers.
Trane Technologies’ leadership transition reinforces management continuity and positions the company to maintain strong operational execution across its global businesses. In addition, growing analyst confidence and the company’s exposure to the expanding demand for data center cooling infrastructure support its long-term growth potential as AI-related investments continue to accelerate.
1. Johnson Controls International plc (NYSE:JCI)
Short Percentage of Shares Outstanding: 1.56%
On June 9, Morgan Stanley analyst Christopher Snyder raised the firm’s price target on Johnson Controls International plc (NYSE:JCI) to $175 from $140 while maintaining an Overweight rating on the shares. The analyst pointed to the company’s increased multi-year organic growth target announced at Gemba Day, where management projected high-single-digit organic growth. Morgan Stanley believes the revised target is ambitious yet achievable, reflecting confidence in the company’s growth strategy and execution capabilities.
Earlier, on June 3, Wolfe Research increased its price target on Johnson Controls International plc (NYSE:JCI) to $171 from $165 while reiterating an Outperform rating. The firm stated that the company’s recent investor event demonstrated meaningful progress in its ongoing operational transformation, particularly through the successful implementation of lean manufacturing initiatives. According to Wolfe Research, the changes underway are expected to improve efficiency, strengthen profitability, and position Johnson Controls to deliver sustained growth as demand for advanced building technologies continues to increase.
Founded in 1885 and headquartered in Cork, Ireland, Johnson Controls International plc (NYSE:JCI) engineers and manufactures building automation, HVAC, fire-safety, and refrigeration systems. As a premier HVAC stock, it provides mission-critical thermal management and advanced cooling infrastructure designed for high-density AI data centers.
While we acknowledge the potential of JCI as the best HVAC stock to buy, 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 JCI and that has 100x upside potential, check out our report about this cheapest AI stock.
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