Vertiv vs. Modine: Which Stock Has the Edge in AI Data Center Cooling?

Artificial intelligence (AI) is driving a rapid expansion of data centers, bringing cooling and power infrastructure into sharper focus. As computing intensity rises, these facilities require advanced systems to handle higher heat loads and ensure reliable operations. Efficient cooling, in particular, is emerging as a key factor influencing how quickly hyperscalers expand capacity.

This shift is creating opportunities for companies that supply the infrastructure behind modern data centers. Vertiv Holdings VRT and Modine Manufacturing Company MOD are two players positioned to benefit from this growing demand.

Vertiv is one of the leading providers of integrated power and thermal infrastructure for data centers, including liquid-cooling technologies designed for high-performance computing environments. Meanwhile, Modine is sharpening its focus on thermal management solutions for data centers. While smaller in scale, the company is building a fast-growing cooling business that could reshape its growth trajectory in the coming years.

While both companies are set to benefit from the AI-driven data center infrastructure boom, their positioning differs. Vertiv brings scale and integrated infrastructure capabilities, while Modine offers faster growth potential in the cooling segment.

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The Case for Vertiv

Vertiv is seeing strong demand as hyperscalers ramp up spending on AI infrastructure. In the fourth quarter of 2025, the company’s organic orders surged 252% year over year and 117% sequentially. It exited 2025 with a backlog of about $15 billion, more than double the level a year earlier, providing solid revenue visibility.

The nature of these orders is also evolving. Vertiv is increasingly winning system-level contracts that bundle multiple power and cooling components into integrated solutions for entire data center facilities. Such projects typically carry better margins.

The company is also expanding its share within each project through solutions like SmartRun and OneCore. SmartRun is a prefabricated system that accelerates the installation of power and cooling infrastructure, while OneCore offers an end-to-end platform designed for large-scale AI computing environments.

Vertiv is also advancing technologies to accelerate deployments, including a Digital Twin platform that helps simulate and optimize data center builds. Integrated with the OneCore architecture, this approach can shorten deployment timelines and reduce overall ownership costs.

Strategic collaborations are further strengthening Vertiv’s position in the AI ecosystem. The company is working with Hut 8 to integrate OneCore into certain AI data center projects. In addition, its partnership with NVIDIA highlights Vertiv’s growing role in supporting high-density computing environments.

To meet rising demand, Vertiv is expanding manufacturing capacity and strengthening its supplier network to convert its growing backlog into revenues.

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The Case for Modine

Modine’s data center business is gaining strong momentum. In fiscal third-quarter 2026, the segment’s sales rose 31% sequentially. Management expects meaningful incremental volumes in the fourth quarter, expecting quarterly data center revenues to exceed $400 million.

Beyond the near-term surge, the company’s order book offers strong visibility. Record intake— split between chillers and other data center products— has extended demand visibility to nearly five years. Many engagements are now structured as long-term supply agreements.

Management expects the data center business to grow 50-70% annually over the next two fiscal years. Capacity to support that growth is expected to be in place by the end of fiscal 2027, with additional chiller lines planned for fiscal 2028.

Based on its current capital plan, Modine sees potential to support up to roughly $3 billion in data center revenues over time.

The company is also reshaping its portfolio through a Reverse Morris Trust that will combine its Performance Technologies unit with Gentherm Incorporated. Once the transaction closes—expected in the fourth quarter of calendar 2026— Modine will emerge as a pure-play diversified Climate Solutions company focused on higher-growth markets such as data centers and commercial HVAC.

Profitability is also expected to improve. Modine is targeting Climate Solutions margins of 20-23% by fiscal 2027, supported by operating leverage as data center volumes scale and the revenue mix shifts toward higher-margin applications.

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Wrapping Up

Both VRT and MOD are well-positioned to benefit from the rapid buildout of AI-driven data center infrastructure. Vertiv’s scale, integrated power and thermal portfolio, and large backlog provide strong visibility. Its deep relationships with hyperscalers and expanding manufacturing footprint further strengthen its role in supporting high-density computing environments.

Modine, on the other hand, is a more focused thermal management player whose fast-growing data center cooling business could drive stronger growth from a smaller base. Strong order intake and long-term supply agreements point to robust demand momentum. In addition, Modine’s ongoing portfolio transformation toward a pure-play Climate Solutions company is sharpening its focus on higher-growth areas such as data center cooling.

Both companies offer solid ways to gain exposure to the growing AI data center infrastructure market, though the choice may depend on whether you want to prioritize scale and diversification or faster growth within a more specialized segment.

With management guiding for strong growth in the data center segment and margins expected to improve as volumes scale, we believe that Modine currently offers a more compelling near-term growth story.

While MOD currently sports a Zacks Rank #1 (Strong Buy), VRT carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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