In this article, we will discuss 7 Best HVAC Stocks to Buy for AI Server Heat Mitigation.
The next bottleneck in the artificial intelligence boom may not be chips or power; it may be heat. That’s the increasingly urgent thesis behind HVAC and thermal management stocks, a category drawing serious attention from infrastructure-focused funds and institutional investors positioning ahead of what could be one of the most overlooked constraints in the entire AI buildout. Unlike the chipmakers and hyperscalers themselves, this is not a crowded trade that is trading at extreme multiples. It’s a foundational infrastructure play where demand is mechanically guaranteed but only for those who understand just how much cooling next-generation data centers actually require.
The investment case is being driven by physics as much as demand. Modern AI training clusters concentrate power density far beyond what traditional air-cooled data centers were ever designed to handle, forcing operators toward liquid cooling, precision HVAC systems, and advanced thermal management just to keep racks operational. Data from Grand View Research projects the global data center cooling market to grow from approximately $20 billion in 2024 at a CAGR of around 13%–15% through 2030, driven by surging AI server deployment and the rapid shift toward high-density rack architectures. Another analysis highlighted by PR Newswire points to accelerating momentum in liquid cooling and immersion cooling adoption as hyperscalers race to prevent thermal throttling across next-generation GPU clusters.
AI server cooling has necessity and physics, which is a thermal constraint that no amount of capital can simply route around. For funds hunting, asymmetric infrastructure plays tied to an unstoppable computing buildout, HVAC, and thermal management stocks may be one of the most overlooked yet mechanically inevitable opportunities in the market today.
With this context in mind, here are the best HVAC stocks to buy for AI server heat mitigation.
Our Methodology
We used stock screeners to identify the best HVAC stocks with a short percentage of shares outstanding of less than 4%. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds. To make the list easier to navigate, we ranked the stocks in descending order of their short percentage of shares outstanding.
“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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).”
7 Best HVAC Stocks to Buy for AI Server Heat Mitigation
7. SPX Technologies, Inc. (NYSE:SPXC)
Short Percentage of Shares Outstanding: 3.88%
On June 21, SPX Technologies, Inc. (NYSE:SPXC) announced a planned leadership transition within its Detection & Measurement segment. John Swann has informed the company of his intention to retire in January 2027, and as part of a structured succession plan, Eric Kaled will assume leadership of the segment effective August 31, 2026. The transition reflects the company’s focus on leadership continuity and maintaining operational momentum within one of its key business units.
On May 6, JPMorgan raised its price target on SPX Technologies, Inc. to $270 from $260 while maintaining an Overweight rating on the shares, reflecting continued confidence in the company’s business outlook and growth prospects.
Founded in 1912 and headquartered in Charlotte, NC, SPX Technologies, Inc. provides highly engineered infrastructure equipment across HVAC and detection-measurement markets. The company’s SPX Cooling Tech division engineers specialize in cooling towers and adiabatic systems to manage the massive thermal loads of hyperscale data centers.
6. Ingersoll Rand Inc. (NYSE:IR)
Short Percentage of Shares Outstanding: 3.88%
On June 3, Morgan Stanley analyst Christopher Snyder lowered the firm’s price target on Ingersoll Rand Inc. (NYSE:IR) to $80 from $92 while maintaining an Equal Weight rating on the shares. The revised price target reflects the firm’s updated valuation outlook, while it continues to view the company’s shares as fairly valued at current levels.
On May 12, Ingersoll Rand Inc. and Garrett Motion announced a multiyear strategic partnership to develop next-generation oil-free air technologies designed to improve energy efficiency, performance, and reliability across key end markets, including food and beverage and life sciences. The collaboration combines Ingersoll Rand’s expertise in compression technology with Garrett’s oil-free centrifugal compressor modules to accelerate innovation in oil-free solutions. Initial products are expected to be introduced to select Ingersoll Rand customers in 2026, with a broader global commercial rollout planned for 2027.
Founded in 1859 and headquartered in Davidson, North Carolina, Ingersoll Rand Inc. is a diversified industrial manufacturer that provides mission-critical flow creation, fluid management, and climate control solutions. It supports AI server heat mitigation through specialized vacuum pumps, condensate pumps, and cooling system valves that dissipate the massive thermal loads generated by modern high-density AI data centers.
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. 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. 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. 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. 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 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 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.
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