Not Chips. Not Memory. Data Center Cooling Is the Unsung AI Infrastructure Play Nobody's Watching
2026-09-30 12:24
•Harsh Chauhan •The Motley Fool
•••••• • Axe Cap view
Cooling the AI Boom: An Overlooked Infrastructure Bet
Data center cooling firms like Vertiv stand to benefit massively from AI’s power-hungry growth, a theme few on the JSE are watching.
AI and cloud computing are gobbling up electricity, forcing data centers to focus heavily on cooling to avoid costly downtime. Vertiv, a leader in data center thermal management, posted impressive 24% revenue and 60% earnings growth recently, backed by a giant $15 billion order book. While South Africa doesn’t list a similar pure-play, this story matters locally through the rand (USD/ZAR). If global demand slows, pressure could weaken the dollar and support emerging market currencies like the rand, aiding South African exporters such as Naspers and MTN. But the inverse is also true: rising US tech capital spending fuels demand for infrastructure providers, pushing the dollar higher and weighing on the rand. It's a nuanced trade mostly in FX and selective counters exposed to tech cycles. Vertiv is a clear buy if you have access, but for local investors, watching USD/ZAR and tech sentiment gives the best pulse. The risk is AI hype cooling or supply chain disruptions hitting delivery schedules. this is just our opinion and not financial advice
Buy Vertiv for direct AI infrastructure exposure if available. Locally, watch USD/ZAR closely; a weaker rand could boost exporters like Naspers and MTN. Avoid rand-hedged assets if dollar strength intensifies.
- VRT
- USD/ZAR
- Naspers
- MTN
- Global tech spending slowdown reducing demand for data center upgrades
- Supply chain or geopolitical disruptions delaying Vertiv’s order fulfillment
6/10
Data center cooling has emerged as a critical but overlooked component of AI infrastructure. Vertiv Holdings, which provides thermal management and cooling solutions for AI data centers, is positioned to benefit from the sector's growth. The company reported 24% revenue growth and 60% EPS growth in Q2, with a $15 billion order backlog and a 2.9 book-to-bill ratio. The global data center cooling market is projected to grow at 22% CAGR through 2033, reaching $128 billion.
Our take is based on reporting first published by The Motley Fool.