Jensen Huang said there is no need to rely on chillers; shares of cooling equipment companies once plunged 20%.

Nvidia CEO Jensen Huang’s comments at CES regarding next-generation chip cooling technology have sparked concerns among investors about demand for data center cooling equipment, causing related stocks to tumble collectively on Tuesday. At the CES exhibition in Las Vegas, Huang stated that server racks equipped with Nvidia’s next-generation Rubin chips will support liquid cooling and do not require dependence on chillers. Chillers are typically one of the core devices provided by companies such as Trane and Johnson Controls for data centers. On Tuesday, stocks related to data center cooling equipment fell broadly. Johnson Controls’ share price plunged as much as 11%, marking the biggest intraday drop since 2022. Modine Manufacturing dropped about 21% at its worst, though later recovered slightly to a 7.44% decline. Trane Technologies also declined. This sell-off reflects investors’ reassessment of the logic behind infrastructure investment for artificial intelligence. Last year, these companies’ stocks rose sharply amid the AI boom, with Johnson Controls up 52% in 2025. Evolution of Liquid Cooling Technology Fuels Demand Concerns Baird analyst Timothy Wojs pointed out in a report to clients: Huang’s remarks have raised some questions and concerns about the long-term positioning of chillers in data centers, especially as liquid cooling technology becomes increasingly prevalent. He added that liquid cooling technology allows systems to operate at higher temperatures. Although Wojs believes that cooling companies’ near-term performance expectations are not at significant risk, he expects “this news will trigger some additional orders concern, especially in the second half of 2026.” Barclays analyst Julian Mitchell noted that Vertiv has a “strong position” in liquid cooling and may benefit from the technological developments discussed by Huang, but its cooler business could be negatively impacted. The company’s stock initially fell as much as 6.8% on Tuesday before rebounding. Mitchell wrote: Given Nvidia’s important place in the entire AI ecosystem, their comments should not be underestimated, even though they may seem somewhat exaggerated at first glance. Analysts Say the Sell-Off Is Overdone Citi analyst Andrew Kaplowitz told clients that the investor exodus from cooling stocks was “overdone.” He said cooling system manufacturers have established partnerships with chipmakers and data center operators, and that the risk of falling behind as data center technology evolves is manageable. Kaplowitz stated: While we acknowledge that Rubin-related comments highlight the rapid evolution of thermal management techniques in data centers, we don’t think this has caught our companies by surprise. Huang’s remarks at CES also fueled a fresh round of rally in data storage stocks, another sector affected by the AI boom. Western Digital’s share price surged more than 27%, making it the best-performing stock in the S&P 500 on Tuesday, after Huang emphasized the growing demand for memory and storage. The stock has soared more than 1000% from its low in April last year. Risk warning and disclaimer Markets are risky; investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment objectives, financial circumstances, or needs. Users should consider whether any opinions, viewpoints, or conclusions here fit their particular situation. You are responsible for any investment made accordingly.