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Will Higher AI Chip Heat Density Expand NVT's Cooling Opportunity?
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Key Takeaways
NVT doubled liquid cooling capacity with Blaine, but expects demand to require further expansion.
NVT expects data center sales to exceed $2 billion in 2026, more than double the prior year's level.
NVT plans Blaine 2 for H1 2027 and a new modular liquid cooling platform launch in fall 2026.
nVent Electric (NVT - Free Report) sees rising heat levels from next-generation AI chips as an opportunity to grow its liquid cooling business. As data centers use more powerful chips, they need better cooling systems to manage the additional heat. nVent Electric has been developing liquid cooling solutions for more than a decade and is expanding its capacity to meet rising customer demand.
The company is increasing its investment in liquid cooling to support the growth of AI data centers. nVent Electric opened a new facility in Blaine, MN, in early 2026, effectively doubling its liquid cooling capacity. However, management said this expansion would not be enough to meet expected demand. The company has announced another facility, Blaine 2, of a similar size, which is expected to open in the first half of 2027. nVent Electric expects total data center sales to exceed $2 billion in 2026, more than double the prior year’s level, with liquid cooling making a significant contribution.
nVent Electric is developing products to meet changing data center requirements. The company is preparing to launch a new modular liquid cooling platform in fall 2026. Management said customer interest in the platform is high. nVent Electric is also working with NVIDIA and other industry participants on product requirements through 2030 to prepare for future generations of AI chips and rising rack-level heat densities.
Management estimates that liquid cooling currently accounts for only 10% to 15% of data center cooling. It expects the technology to have a long growth opportunity as data centers adopt more powerful chips and upgrade their cooling systems. This could support demand for nVent Electric’s liquid cooling products beyond the initial build-out of AI data centers. As of now, the company will need to bring new capacity online and scale production to meet customer demand. Its ability to execute on these expansion plans will be important to sustaining growth in this business.
How Do Competitors Fare Against NVT
nVent Electric faces stiff competition from AI data center infrastructure players such as Vertiv (VRT - Free Report) and Super Micro Computer (SMCI - Free Report) .
Vertiv is also benefiting from strong AI data center spending and has a broad portfolio covering power and thermal management. VRT offers power, cooling and services as an integrated solution and is expanding its liquid-cooling capabilities through acquisitions, including Strategic Thermal Labs, which added server-side liquid cooling and cold-plate expertise. VRT expects 2026 sales of $14 billion, suggesting 37% year-over-year growth, with organic growth of 31%.
Super Micro Computer is another strong player in AI data-center infrastructure, with its business spanning servers, storage, networking and direct liquid cooling. Its data center building block solutions combine GPU and CPU servers, storage, direct liquid cooling, cooling distribution units, networking and data-center management software. SMCI is also expanding its liquid-cooling capacity and expects its manufacturing network to support more than 3,000 direct liquid-cooled racks per month. For fiscal 2027, the company expects revenues of $65-$72 billion.
From a valuation standpoint, NVT trades at a forward price-to-sales ratio of 3.32X, lower than the industry’s average of 3.46X. NVT has a Value Score of D.
NVT’s Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for nVent Electric’s 2026 and 2027 earnings per share (EPS) implies year-over-year growth of 53.1% and 23.8%, respectively. EPS estimates for 2026 and 2027 have both been revised downward over the past 30 days.
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Image: Bigstock
Will Higher AI Chip Heat Density Expand NVT's Cooling Opportunity?
Key Takeaways
nVent Electric (NVT - Free Report) sees rising heat levels from next-generation AI chips as an opportunity to grow its liquid cooling business. As data centers use more powerful chips, they need better cooling systems to manage the additional heat. nVent Electric has been developing liquid cooling solutions for more than a decade and is expanding its capacity to meet rising customer demand.
The company is increasing its investment in liquid cooling to support the growth of AI data centers. nVent Electric opened a new facility in Blaine, MN, in early 2026, effectively doubling its liquid cooling capacity. However, management said this expansion would not be enough to meet expected demand. The company has announced another facility, Blaine 2, of a similar size, which is expected to open in the first half of 2027. nVent Electric expects total data center sales to exceed $2 billion in 2026, more than double the prior year’s level, with liquid cooling making a significant contribution.
nVent Electric is developing products to meet changing data center requirements. The company is preparing to launch a new modular liquid cooling platform in fall 2026. Management said customer interest in the platform is high. nVent Electric is also working with NVIDIA and other industry participants on product requirements through 2030 to prepare for future generations of AI chips and rising rack-level heat densities.
Management estimates that liquid cooling currently accounts for only 10% to 15% of data center cooling. It expects the technology to have a long growth opportunity as data centers adopt more powerful chips and upgrade their cooling systems. This could support demand for nVent Electric’s liquid cooling products beyond the initial build-out of AI data centers. As of now, the company will need to bring new capacity online and scale production to meet customer demand. Its ability to execute on these expansion plans will be important to sustaining growth in this business.
How Do Competitors Fare Against NVT
nVent Electric faces stiff competition from AI data center infrastructure players such as Vertiv (VRT - Free Report) and Super Micro Computer (SMCI - Free Report) .
Vertiv is also benefiting from strong AI data center spending and has a broad portfolio covering power and thermal management. VRT offers power, cooling and services as an integrated solution and is expanding its liquid-cooling capabilities through acquisitions, including Strategic Thermal Labs, which added server-side liquid cooling and cold-plate expertise. VRT expects 2026 sales of $14 billion, suggesting 37% year-over-year growth, with organic growth of 31%.
Super Micro Computer is another strong player in AI data-center infrastructure, with its business spanning servers, storage, networking and direct liquid cooling. Its data center building block solutions combine GPU and CPU servers, storage, direct liquid cooling, cooling distribution units, networking and data-center management software. SMCI is also expanding its liquid-cooling capacity and expects its manufacturing network to support more than 3,000 direct liquid-cooled racks per month. For fiscal 2027, the company expects revenues of $65-$72 billion.
NVT's Price Performance, Valuation & Estimates
Shares of nVent Electric have jumped 25.2% year to date against the Zacks Electronics - Miscellaneous Components industry’s decline of 21%.
nVent Electric’s YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NVT trades at a forward price-to-sales ratio of 3.32X, lower than the industry’s average of 3.46X. NVT has a Value Score of D.
NVT’s Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for nVent Electric’s 2026 and 2027 earnings per share (EPS) implies year-over-year growth of 53.1% and 23.8%, respectively. EPS estimates for 2026 and 2027 have both been revised downward over the past 30 days.
Image Source: Zacks Investment Research
NVT currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.