Artificial intelligence is reshaping demand across industries far beyond the tech sector, and industrial cooling companies are emerging as major beneficiaries of the boom.
Data centers powering AI workloads rely on high-powered chips that generate extraordinary amounts of heat, making cooling technology a critical infrastructure requirement.
Electricity demand in the U.S. rose just 10% between 2005 and 2025, but is now projected to surge by 60% between 2025 and 2045, driven significantly by AI expansion.
That dramatic step change in power consumption brings with it an equally significant need for thermal management systems inside the facilities running these workloads.
Trane Technologies (NYSE: TT) and Carrier Worldwide (NYSE: CARR) are both capitalizing on this demand, and their most recent earnings results tell a compelling story.
When Trane reported second-quarter 2026 earnings, it posted organic revenue growth of 9% and adjusted earnings growth of 11%, solid figures for any large industrial company.
The standout number, however, was the company’s backlog, which hit a record $12.1 billion, representing a 70% increase year over year driven by its commercial cooling business.
Trane also reported a book-to-bill ratio of 135%, meaning it is signing dramatically more new contracts than it is currently able to fulfill, a strong signal of sustained future revenue.
Carrier’s second-quarter 2026 results showed a more modest 3% organic revenue increase, with adjusted earnings down 7%, but the backlog picture was similarly striking.
Carrier’s backlog reached a record $8 billion, up 40% year over year and 20% sequentially from the first quarter of 2026, reflecting surging customer commitments.
The breakdown of Carrier’s order growth reveals just how concentrated AI demand has become, with overall orders up 40%, commercial orders jumping 65%, and data center orders rising by 300%.
Elon Musk’s decision to build a dedicated power plant to supply electricity to Space Exploration Corporation’s (NASDAQ: SPCX) Colossus I and Colossus II data centers illustrates how extreme the energy and thermal demands have become.
Musk has even floated the idea of building data centers in outer space, underscoring just how seriously the industry is treating the challenge of managing heat at scale.
For Trane and Carrier, the record backlogs function as a forward-looking window into future revenues, since a backlog reflects sales already committed but not yet delivered.
Both companies are trading above their five-year average price-to-sales and price-to-earnings ratios, reflecting how thoroughly Wall Street has already priced in the AI cooling opportunity.
That valuation premium means the stocks are likely best suited to growth-oriented investors who believe the AI infrastructure build-out still has a long runway ahead.
With U.S. electricity demand set to climb steeply over the next two decades and data center construction showing no signs of slowing, the cooling market appears positioned for durable, long-term growth.
