The Cooling Stocks Worth Buying — and the One That’s Already Priced for Perfection

Across the U.S., Europe, and Taiwan, the liquid cooling theme spans pure-plays trading at extreme premiums, diversified industrials offering cheaper exposure, and component makers riding triple-digit growth.

Vertiv: The Undisputed Leader, At an Undisputedly Steep Price

No conversation about cooling stocks can skip Vertiv. It is the closest thing to a pure-play on this theme in U.S. markets, with data center infrastructure representing over 80% of revenue and a co-design partnership with NVIDIA on reference architectures that effectively makes Vertiv components the default specification on new platform launches.

The fundamentals back up the enthusiasm. Vertiv guided full-year 2026 organic sales growth of 27% to 29%, with adjusted diluted EPS expected to rise 43% at the midpoint. Fourth-quarter 2025 organic orders grew approximately 252% year-over-year, a figure that signals genuinely supply-constrained demand rather than a maturing growth story. The company’s backlog now exceeds $15 billion, providing 12 to 18 months of forward revenue visibility most industrial companies would envy.

None of that comes cheap. As of late June 2026, Vertiv trades at a trailing P/E near 76 to 81 and a forward P/E in the 45 to 47 range — more than double the industrial products sector’s median forward multiple of roughly 21. GuruFocus rates the stock “significantly overvalued” relative to its own fair value estimate. This is the central tension for anyone considering Vertiv: the operating momentum is real, but so is the premium already embedded in the share price. A single disappointing quarter, or any sign that the AI infrastructure buildout is decelerating, could trigger an outsized correction relative to peers trading at more conventional multiples.

The Diversified Alternatives: Eaton and Schneider Electric

For investors who want exposure to the cooling theme without paying Vertiv’s premium, the diversified industrials offer a different risk profile. Eaton’s $9.5 billion Boyd Thermal acquisition gave it instant liquid cooling scale, with Boyd projected to contribute roughly $1.7 billion in 2026 revenue. Because data center cooling is one growth vector among Eaton’s much broader electrical and power management portfolio, the segment’s exceptional growth gets diluted in consolidated results — but that diversification also means Eaton’s overall earnings are far less exposed to any single downturn in AI infrastructure spending.

Schneider Electric occupies similar territory. With data center representing roughly 24% of its revenue versus Vertiv’s 80%-plus, Schneider trades at a far more modest valuation — around 25x forward earnings — while still holding a genuine NVIDIA reference design partnership for the GB300 NVL72 platform. The trade-off is straightforward: lower volatility and a cheaper entry point, in exchange for diluted upside if the cooling segment specifically continues to outgrow the rest of the business.

The Growth Transition Names: Modine and the Smaller Pure-Plays

Between Vertiv’s extreme premium and the diversified industrials’ diluted exposure sits a category of smaller companies undergoing a genuine business mix transformation toward data center cooling. Modine Manufacturing is the clearest example: its fiscal third-quarter 2026 data center sales rose 78% year-over-year, prompting management to raise full-year sales growth guidance to 15% to 20%. Unlike Eaton or Schneider, Modine is small enough that data center growth meaningfully moves the overall company’s numbers, while trading at roughly half Vertiv’s earnings multiple — offering investors a way to participate in similar growth dynamics without paying the largest pure-play’s full premium.

Taiwan’s Cold Plate Manufacturers: Explosive Growth, Already Re-Rated

Taiwan’s thermal solutions manufacturers — companies like AVC (Asia Vital Components) and Auras Technology — sit at the cold plate manufacturing layer of the value chain, the precision engineering chokepoint that NVIDIA’s standardization hasn’t fully commoditized. Their growth has been extraordinary: some of these names have seen their share prices multiply several times over from 52-week lows as AI server cooling demand accelerated. AVC’s stock has reportedly climbed roughly fourfold over a two-year window as its cooling component business scaled alongside the broader AI server buildout in Taiwan’s supply chain.

That explosive re-rating is precisely the risk investors need to weigh now. Stocks that have already multiplied several times over carry less margin for disappointment — any slowdown in hyperscaler capital expenditure, a shift in NVIDIA’s reference design preferences, or new entrants gaining qualification could compress these elevated valuations quickly. The investment case here has shifted from “is this theme real” to “how much of the realistic growth trajectory is already reflected in the share price.”

✦ THE SCOPE — SERIES SUMMARY

• AI accelerators now draw up to 1,400 watts per chip, pushing rack-level cooling demands seven to nine times beyond what air cooling was ever designed to handle — making liquid cooling mandatory infrastructure, not optional.
• Roughly $14 billion in recent M&A has concentrated specifically on cold plate and CDU technology, the layers of the value chain commanding the highest strategic premiums.
• NVIDIA’s vendor certification and reference design programs function as a gatekeeping system, determining which cooling companies gain meaningful access to hyperscaler infrastructure spend.
• Vertiv remains the clearest pure-play leader but trades at roughly double the industrial sector’s valuation multiple, while Eaton, Schneider, and Modine offer varying degrees of cheaper, more diversified exposure to the same theme.
• Taiwan’s cold plate manufacturers have already re-rated several times over, meaning the core investment question for that segment has shifted from thesis validation to valuation discipline.

This content is produced by The Scope for informational purposes only and does not constitute investment advice. All investment decisions are the sole responsibility of the reader. The Scope accepts no legal liability for actions taken based on this analysis.