5 Best Water Infrastructure Stocks to Buy as AI Data Centers Strain Resources

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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. (NYSE:FERG) is a North American distributor of water, air, plumbing, HVAC, PVF, waterworks, wastewater, and related infrastructure products.

While we acknowledge the potential of FERG to grow, our conviction lies in the belief that some other 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 FERG and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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