We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AI Data Center Cooling: MOD's Pivot vs. VRT's Moat - The Better Bet?
Read MoreHide Full Article
Key Takeaways
VRT is the stronger AI cooling pick, backed by scale, integration and hyperscaler ties.
Vertiv expects $13.5B-$14B in 2026 sales and 29-31% organic growth versus 2025.
Modine's data center revenues hit $1.1B in fiscal 2026, but margins and execution remain watchpoints.
Artificial intelligence (AI) is generating a lot of heat—literally. As data centers pack in more GPUs to power the next wave of AI workloads, keeping those machines from overheating has become as critical as the chips themselves. That has made data center cooling infrastructure one of the hottest investment themes around. Two stocks positioned to capitalize include Vertiv Holdings (VRT - Free Report) and Modine Manufacturing (MOD - Free Report) .
Vertiv is the established giant with deep hyperscaler relationships and an integrated infrastructure portfolio that spans thermal, power and software. Modine is like the upstart worth watching—a former auto-parts company reinventing itself and building a fast-growing data center cooling business. Both are riding the same macro tailwind, but are offering different propositions. Here's how they stack up.
The Case for Vertiv: Scale, Integration, and Visibility
Vertiv's edge starts with its extensive product portfolio, which covers liquid cooling, uninterruptible power supplies, switchgear, busbars, modular infrastructure and monitoring systems. When hyperscalers want a single vendor to handle the full power and thermal stack of an AI factory, Vertiv is often where they turn.
VRT’s first-quarter 2026 numbers were encouraging. Revenues grew 30% year over year, organic sales climbed 23%, adjusted operating margins expanded 430 basis points, and free cash flow more than doubled. The company’s ability to capitalize on the accelerating demand for data center infrastructure, especially in AI and cloud deployments, has been a key factor in this performance.
Acquisitions are compounding the advantage. Vertiv absorbed PurgeRite for fluid management and BMarko Structures for modular deployments. The acquisition of Strategic Thermal Labs strengthens Vertiv's engineering capability at the server-side liquid cooling interface. More recently, ThermoKey buyout expands Vertiv's heat rejection and heat-exchange portfolio, particularly across EMEA, and gives customers more flexibility to optimize thermal architectures across multiple compute generations.
The company's ability to deliver integrated, prefabricated solutions like OneCore and SmartRun is particularly valued as customers seek faster deployment and greater efficiency. Building on this, Vertiv recently integrated its SmartRun platform with NVIDIA's Omniverse DSX— creating the first converged physical infrastructure digital twin for AI factory design. The solution reduces design changes, lowers integration risks, and speeds up AI factory deployment by moving from traditional document-based planning to a model-based approach.
Vertiv now expects net sales of $13.5 billion to $14 billion, with organic net sales growth of 29% to 31% versus 2025. Adjusted earnings per share are projected between $6.30 and $6.40, representing an uptick of 50-52% year over year. Vertiv exited 2025 with a record order backlog of $15 billion— up 109% year over year. That locks in multi-year revenue visibility well into 2027, making Vertiv one of the well-positioned beneficiaries of the hyperscaler AI buildout.
Vertiv Holdings Co. Price, Consensus and EPS Surprise
Modine's transformation is real and it's accelerating. The company has been building out a data center cooling unit that barely existed a few years ago. Fiscal 2026 data center revenues hit $1.1 billion, up 73% year over year. The company ended fiscal 2026 with its second consecutive quarter of record order intake. Modine’s data center business is supported by record order intake and roughly five years of pipeline visibility, underpinned by strong exposure to hyperscale customers.
A newly signed long-term capacity agreement commits more than $4 billion of Airedale chiller products to a strategic customer between 2027 and 2029. As part of the agreement, Modine received a $165 million upfront payment to support manufacturing investments needed to fulfill future orders. It suggests that the buyer views Modine's cooling technology as important enough to help finance its growth.That reduces execution risk, improves cash flow visibility and allows management to invest aggressively while preserving balance sheet flexibility.
On the technology side, Modine recently unveiled a 3-megawatt chiller that delivers 50% more cooling capacity with only a 9% increase in physical footprint. That is what customers need as rack densities climb and floor space stays constrained. Co-development arrangements with key customers are also building switching costs and improving demand visibility.
Management guides data center revenue growth of 60-80% in fiscal 2027 and 50-70% in fiscal 2028. A Reverse Morris Trust transaction combining its Performance Technologies unit with Gentherm, expected to close in the end of 2026, will leave Modine as a focused Climate Solutions company. The operational story will only get sharper from there.
Modine continues to apply 80/20 principles to simplify operations and direct resources toward its highest-returning products and markets. The approach has delivered results— fiscal 2026 marked the company's fourth consecutive year of record revenues and adjusted EBITDA. That said, gross margins fell 320 basis points in the last reported quarter, pressured by capacity expansion costs, higher material prices, and tariffs. While the company views it as transitional, it's a number worth watching as volumes scale.
Modine Manufacturing Company Price, Consensus and EPS Surprise
On valuation, Modine trades at 3.5x forward sales while Vertiv commands around 7.5x — a meaningful gap, and one that reflects the difference in scale, margin profile, and market confidence.
Image Source: Zacks Investment Research
MOD has climbed about 113% year to date, outpacing VRT's 85% return. The rally reflects growing optimism around Modine's role in the AI data center buildout. Still, the company must prove it can translate strong demand into long-term growth by expanding capacity, integrating acquisitions, and protecting margins as the business scales.
Image Source: Zacks Investment Research
Our Take: VRT Is the Better Bet
Modine's transformation is real and the growth numbers are hard to ignore. But strong growth alone doesn't make a stock a better buy.
Vertiv has what Modine is still building— scale, integration and proven hyperscaler relationships. Modine looks cheaper, but execution risk is real and the pure-play thesis only fully materializes once the Gentherm deal closes. Vertiv demands a premium, but with 2026 EPS growth of 51%, implied by the Zacks Consensus Estimate and positive revisions over the past seven days, the optimism around the stock only seems to be building. The valuation is steep, but the fundamentals justify the ask.
View the Zacks #1 Rank List
Image: Bigstock
AI Data Center Cooling: MOD's Pivot vs. VRT's Moat - The Better Bet?
Key Takeaways
Artificial intelligence (AI) is generating a lot of heat—literally. As data centers pack in more GPUs to power the next wave of AI workloads, keeping those machines from overheating has become as critical as the chips themselves. That has made data center cooling infrastructure one of the hottest investment themes around. Two stocks positioned to capitalize include Vertiv Holdings (VRT - Free Report) and Modine Manufacturing (MOD - Free Report) .
Vertiv is the established giant with deep hyperscaler relationships and an integrated infrastructure portfolio that spans thermal, power and software. Modine is like the upstart worth watching—a former auto-parts company reinventing itself and building a fast-growing data center cooling business. Both are riding the same macro tailwind, but are offering different propositions. Here's how they stack up.
The Case for Vertiv: Scale, Integration, and Visibility
Vertiv's edge starts with its extensive product portfolio, which covers liquid cooling, uninterruptible power supplies, switchgear, busbars, modular infrastructure and monitoring systems. When hyperscalers want a single vendor to handle the full power and thermal stack of an AI factory, Vertiv is often where they turn.
VRT’s first-quarter 2026 numbers were encouraging. Revenues grew 30% year over year, organic sales climbed 23%, adjusted operating margins expanded 430 basis points, and free cash flow more than doubled. The company’s ability to capitalize on the accelerating demand for data center infrastructure, especially in AI and cloud deployments, has been a key factor in this performance.
Acquisitions are compounding the advantage. Vertiv absorbed PurgeRite for fluid management and BMarko Structures for modular deployments. The acquisition of Strategic Thermal Labs strengthens Vertiv's engineering capability at the server-side liquid cooling interface. More recently, ThermoKey buyout expands Vertiv's heat rejection and heat-exchange portfolio, particularly across EMEA, and gives customers more flexibility to optimize thermal architectures across multiple compute generations.
The company's ability to deliver integrated, prefabricated solutions like OneCore and SmartRun is particularly valued as customers seek faster deployment and greater efficiency. Building on this, Vertiv recently integrated its SmartRun platform with NVIDIA's Omniverse DSX— creating the first converged physical infrastructure digital twin for AI factory design. The solution reduces design changes, lowers integration risks, and speeds up AI factory deployment by moving from traditional document-based planning to a model-based approach.
Vertiv now expects net sales of $13.5 billion to $14 billion, with organic net sales growth of 29% to 31% versus 2025. Adjusted earnings per share are projected between $6.30 and $6.40, representing an uptick of 50-52% year over year. Vertiv exited 2025 with a record order backlog of $15 billion— up 109% year over year. That locks in multi-year revenue visibility well into 2027, making Vertiv one of the well-positioned beneficiaries of the hyperscaler AI buildout.
Vertiv Holdings Co. Price, Consensus and EPS Surprise
Vertiv Holdings Co. price-consensus-eps-surprise-chart | Vertiv Holdings Co. Quote
The Case for Modine: Fast Growth, Sharp Focus
Modine's transformation is real and it's accelerating. The company has been building out a data center cooling unit that barely existed a few years ago. Fiscal 2026 data center revenues hit $1.1 billion, up 73% year over year. The company ended fiscal 2026 with its second consecutive quarter of record order intake. Modine’s data center business is supported by record order intake and roughly five years of pipeline visibility, underpinned by strong exposure to hyperscale customers.
A newly signed long-term capacity agreement commits more than $4 billion of Airedale chiller products to a strategic customer between 2027 and 2029. As part of the agreement, Modine received a $165 million upfront payment to support manufacturing investments needed to fulfill future orders. It suggests that the buyer views Modine's cooling technology as important enough to help finance its growth.That reduces execution risk, improves cash flow visibility and allows management to invest aggressively while preserving balance sheet flexibility.
On the technology side, Modine recently unveiled a 3-megawatt chiller that delivers 50% more cooling capacity with only a 9% increase in physical footprint. That is what customers need as rack densities climb and floor space stays constrained. Co-development arrangements with key customers are also building switching costs and improving demand visibility.
Management guides data center revenue growth of 60-80% in fiscal 2027 and 50-70% in fiscal 2028. A Reverse Morris Trust transaction combining its Performance Technologies unit with Gentherm, expected to close in the end of 2026, will leave Modine as a focused Climate Solutions company. The operational story will only get sharper from there.
Modine continues to apply 80/20 principles to simplify operations and direct resources toward its highest-returning products and markets. The approach has delivered results— fiscal 2026 marked the company's fourth consecutive year of record revenues and adjusted EBITDA. That said, gross margins fell 320 basis points in the last reported quarter, pressured by capacity expansion costs, higher material prices, and tariffs. While the company views it as transitional, it's a number worth watching as volumes scale.
Modine Manufacturing Company Price, Consensus and EPS Surprise
Modine Manufacturing Company price-consensus-eps-surprise-chart | Modine Manufacturing Company Quote
Valuation and Price Performance
On valuation, Modine trades at 3.5x forward sales while Vertiv commands around 7.5x — a meaningful gap, and one that reflects the difference in scale, margin profile, and market confidence.
MOD has climbed about 113% year to date, outpacing VRT's 85% return. The rally reflects growing optimism around Modine's role in the AI data center buildout. Still, the company must prove it can translate strong demand into long-term growth by expanding capacity, integrating acquisitions, and protecting margins as the business scales.
Our Take: VRT Is the Better Bet
Modine's transformation is real and the growth numbers are hard to ignore. But strong growth alone doesn't make a stock a better buy.
Vertiv has what Modine is still building— scale, integration and proven hyperscaler relationships. Modine looks cheaper, but execution risk is real and the pure-play thesis only fully materializes once the Gentherm deal closes. Vertiv demands a premium, but with 2026 EPS growth of 51%, implied by the Zacks Consensus Estimate and positive revisions over the past seven days, the optimism around the stock only seems to be building. The valuation is steep, but the fundamentals justify the ask.
For an investor building a position in AI infrastructure today, Vertiv is the stronger pick. While MOD currently sports a Zacks Rank #3 (Hold), VRT carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.