Forget chips, liquid cooling may be the next big AI trade: these stocks are leading

• Carrier reported data-center-related orders up over 500%, with backlog covering its $1.5 billion sales target; Trane's commercial HVAC backlog increased $2.7 billion in Q1
• Vertiv posted 30% revenue growth to $2.7 billion and raised full-year earnings guidance to $6.30-$6.40 per share; TD Cowen raised price target to $387
• Nvidia's Vera Rubin AI server configurations shipping in late 2026 will come with integrated liquid cooling systems as standard, accelerating industry-wide adoption

Summary

Liquid cooling technology is emerging as the next major investment opportunity in AI infrastructure, beyond traditional semiconductor plays. Goldman Sachs reports liquid cooling-themed stocks are up 30% year-to-date as AI data centers demand more efficient thermal management solutions.

Key Driver: Next-generation AI systems generate extreme heat, making traditional air cooling inadequate. Liquid cooling can reduce electricity consumption for cooling by up to 10X, allowing more power for computing operations. NVIDIA's Vera Rubin configurations, shipping later in 2026, come with integrated liquid cooling systems as standard, accelerating industry adoption.

Leading Companies and Performance:

• Vertiv (VRT): Q1 revenue jumped 30% to $2.7 billion with adjusted earnings of $1.17 per share. Raised full-year guidance to $6.30-$6.40 per share. TD Cowen upgraded price target to $387 from $347.

• Carrier: Data-center orders surged over 500%, with $1.5 billion in segment sales targeted for 2026, fully backed by current backlog.

• Trane Technologies: Commercial HVAC backlog increased $2.7 billion from year-end, boosted by $1 billion Stellar Energy acquisition.

• Eaton: Posted better-than-expected quarterly earnings driven by AI data-center demand.

• Ecolab: Acquiring liquid-cooling provider CoolIT for $4.8 billion.

Market Implications: The transition to liquid cooling represents a multi-year infrastructure buildout cycle. Analysts view advanced thermal management as "essential" for maximizing AI token production and hyperscaler ROI. Key risk: potential slowdown in AI capital expenditure or delayed liquid cooling deployments could impact order growth and company guidance.