Liquid cooling has become a crucial technology as artificial intelligence (AI), which is accelerating the demand for data centers with advanced infrastructure, grows.
Jensen Huang highlighted during a recent earnings conference that data centers are moving away from air-cooled systems and towards liquid cooling. This is due to the increasing complexity of AI chips.
The need to improve cooling and the cost-savings associated with energy-efficient cooling technology are driving this shift.
Two top companies are poised to profit from this trend.
Vertiv Holdings Co. (NYSE:VRT)
Vertiv Holdings, located in Westerville in Ohio, is one of the leading players in data center infrastructure.
Vertiv, with its strong focus on data centers solutions, is in a good position to take advantage of the move towards liquid cooling.
Recently, the company reported earnings which exceeded Wall Street expectations. Both profit and revenue grew year over year.
Vertiv, despite a decline of more than 20 percent from the peak reached in May, is trading today at a discounted price, which makes it an appealing investment.
It also offers a small dividend yield (0.12%), adding to its appeal.
Vertiv is rated “buy” by analysts, and the target price has been set at $103, which represents a 28% potential increase from current levels.
Johnson Controls International Plc
Johnson Controls, known traditionally for their HVAC systems and liquid cooling products, is exploring new opportunities.
Johnson Controls, with its expertise in environmental management and building control systems, is well positioned to grow in the data center sector.
RBC reports that only 5.5% of data centres use liquid cooling. However, this number is projected to increase at an annual compound growth rate of 40 percent.
Johnson Controls is a great investment because of its anticipated growth, particularly given the company’s recent performance.
Stock has recovered 35% since its low for the year and yields a healthy 2.07% dividend.
The stock has an “overweight rating” from analysts, and a price target of $77. This suggests a possible upside of 10% over its current price.
The post, Top 2 Stocks to Buy as AI Fuels Demand for Liquid Cooling in Data Centers may change as new information unfolds
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