\u201cWe\u2019re seeing supersonic growth on the back of AI and in general over the past three years the price that you can get from the data centre customer has been stronger than the price elsewhere,\u201d said Chris Snyder, an analyst at Morgan Stanley. <\/p>\n
It comes after other US-listed groups, such as Caterpillar, Cummins and Johnson Controls, have capitalised on the data centre boom at a time when economic uncertainty and trade barriers erected under US President Donald Trump have weighed on spending by customers in manufacturing and the commercial real estate market. <\/p>\n
<\/p>\n US factory activity has been declining over the past few months, with the ISM manufacturing purchasing managers\u2019 index staying steadfastly in contraction territory since March. <\/p>\n Spending on data centres has proven resilient with analysts anticipating that more than $400bn will be spent on the build-out of the infrastructure in the current fiscal year, according to Gartner. Hyperscalers make up more than three-quarters of this expenditure with spending predicted to grow next year.<\/p>\n Vimal Kapur, Honeywell\u2019s chief executive, told investors during a recent earnings call the company was \u201cfocused on pivoting\u201d into higher-growth verticals such as data centres. \u201cThose segments are growing regardless of the current conditions,\u201d he said. <\/p>\n Honeywell has in the past 18 months started to focus on providing controls for hybrid cooling systems to data centres and has experienced double-digit growth in sales of their new hybrid controller for data centres and similar applications.<\/p>\n Morgan Stanley\u2019s Snyder said that servicing was likely to provide a long tail of business for industrial companies but cautioned that smaller players who had yet to break into the market could miss the boat given investment would eventually taper from elevated levels. <\/p>\n Colorado-based Gates Industrial, a manufacturer of equipment for the heavy duty trucking industry, has in the past year started to push into the market designing pipes and pumps used to circulate coolant around server racks, a key component at a time when Nvidia\u2019s most advanced Blackwell chips for AI model training and applications mandate liquid cooling. <\/p>\n Recommended<\/p>\n<\/a><\/p>\n
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Liquid cooling systems for server racks are another growth area for industrial companies \u00a9 Amanda Andrade-Rhoades for The Washington Post via Getty Images<\/p>\n
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