Snapshot — the group at a glance

Traditional HVAC (heating, ventilation and air conditioning), CRAC (computer room air conditioning) and CRAH (computer room air handler) systems cool data centers by pushing chilled air across server racks. A CRAC unit contains its own compressor and refrigerant loop; a CRAH unit uses chilled water piped in from a central chiller plant. Both blow cold air through raised floors or overhead ducts to absorb heat from servers. This is the cooling technology installed in virtually every data center built before 2020 and in every facility today running racks below roughly 20 kW. The named US-listed makers are Johnson Controls (JCI — York chillers, CRAHs, coolant distribution units), Trane Technologies (TT — Trane commercial chillers and air handlers), Lennox International (LII — building climate solutions, rooftop units), and AAON (AAON — precision cooling units, plus the BASX data-center brand which has shifted heavily toward liquid cooling).

Air cooling remains the dominant installed base and still handles ambient conditioning in even the newest AI facilities, but pure air-only designs are being displaced by liquid cooling above 30 kW/rack. JCI and AAON are pivoting toward hybrid air+liquid and data-center-specific products — JCI's backlog hit $20B in Q2 FY26 with data centers cited as the primary demand driver, and AAON's BASX brand (data-center cooling, increasingly liquid) more than doubled revenue in 2025 and raised 2026 guidance to 40–45% growth. How much of each company's revenue actually comes from data center cooling is not separately disclosed by any of the four.

The product & how money is made

A central chiller plant (large industrial refrigeration equipment, often multiple units for redundancy) produces chilled water at roughly 40–45°F. That water flows to CRAHs — fan-and-coil units inside the data hall — which blow the cooled air under a raised floor or through overhead ducts. Hot exhaust air returns to the CRAHs, passes over the chilled-water coils, drops in temperature, and recirculates. In mild weather, economizer modes bypass the chiller and use outside air directly, cutting energy costs. Every watt of IT power consumed becomes roughly one watt of heat, and the cooling system carries that heat to outdoor cooling towers or dry coolers where it dissipates.

The unit of demand is cooling tonnage per megawatt of IT load. One "ton" of cooling equals 12,000 BTU/hr. Since 1 kW of electricity produces 3,412 BTU/hr of heat, 1 MW of IT load produces roughly 3.41 million BTU/hr, requiring approximately 284 tons of raw cooling. After the standard 1.3× ASHRAE oversizing factor (accounting for lights, UPS losses, distribution overhead, and humidity control), practical deployed capacity is roughly 350–400 tons per MW.

Source: ASHRAE Standard 90.1; Dataspan cooling calculator; C&C Technology Group cooling guide.

How money is made: (1) Equipment sales — chillers, CRAHs, rooftop units, controls — sold up front when a data center is built or retrofitted. A complete air-cooling system costs roughly $1.5–2M per MW of IT capacity est.. (2) Service contracts and parts — the installed base requires regular maintenance (filter changes, coil cleaning, refrigerant management, compressor overhauls), producing recurring revenue over a 15–25 year asset life. JCI's services reached $1.9B in Q4 FY25 alone (33% of quarterly sales), growing 9% YoY. (3) Controls and building automation — software and sensors that optimize cooling efficiency (PUE). JCI and Trane both sell integrated controls systems.

Source: Introl blog, air-cooling infrastructure cost benchmarks; JCI Q4 FY25 press release.

The pivot underway: from air to hybrid

Pure air cooling cannot handle rack densities above roughly 30–40 kW, and modern AI racks (NVIDIA GB200 NVL72) run at 60–120 kW. JCI launched coolant distribution units (CDUs), the York YDAM chiller (3.5 MW capacity per unit, 20% denser than competitors, launched April 2026), and the YK-HT waterless chiller. AAON's BASX brand has shifted heavily into custom-engineered liquid cooling for data centers. Trane's applied-equipment bookings surged 120%+ in Q4 2025, driven partly by data-center-adjacent cooling. Lennox has no disclosed data center liquid-cooling product line. The revenue from these pivots is not broken out from legacy HVAC in any company's filings.

Source: JCI Q2 FY26 earnings (Facilities Dive); AAON Q1 2026 press release; TT Q4 2025 press release.

Demand — how much the world will want this

Known / contracted

• JCI backlog: $20.0B total, up 26% organically YoY as of Q2 FY26 (March 2026). Americas backlog $14.9B, up 32%. Americas systems orders grew 57% YoY, "primarily fueled by hyperscale data center cooling demand." contracted
• TT backlog: $7.8B, up 15% YoY as of year-end 2025. Americas Commercial HVAC backlog up 25%; EMEA up ~40%. Q4 2025 applied equipment bookings up 120%+ YoY. Full-year bookings $22.6B, +11% organic; Q4 book-to-bill 114% for global Commercial HVAC. contracted
• AAON backlog: $2.13B, up 107% YoY as of Q1 2026. BASX-branded backlog up 160% YoY. BASX book-to-bill ratio above 2.0x in Q1 2026. contracted
• LII: no backlog figures disclosed. Q1 2026 Building Climate Solutions segment profit up 63% YoY with segment margin of 19.7% (+300 bps), driven by "data centre and building renovation demand." contracted

Forecast / directional

• Global data center capacity: ~103 GW in 2025, projected to reach ~200 GW by 2030. That implies ~97 GW of new capacity, each MW needing 350–400 tons of cooling from some combination of air and liquid systems. est.
• Air cooling's continuing role: even in liquid-cooled facilities, air still handles 20–30% of the total cooling load (ambient room conditioning, storage servers, networking gear), per Schneider Electric. "Almost no new builds will be exclusively air-cooled nor exclusively liquid" — Sarah Renaud, ENCOR Advisors. est.
• Total DC cooling market: $20.8B in 2025 → $49.9B by 2034 (10.2% CAGR). Room-based (air) cooling held 76% share in 2024 but is growing at 9.7% CAGR (slower than the 10.2% total), implying gradual share loss to liquid. The US alone generated $6.3B in 2024. est.
• JCI data center orders: JCI collaborated with NVIDIA on next-gen thermal reference designs. CEO Weidemanis described new chiller orders as "more about what's to come" — implying a pipeline still building. est.
• AAON BASX trajectory: Management estimates the broader DC thermal management market grows ~30% annually est.. AAON sees its own capacity "above $2B for sure" (up from earlier "napkin math" of ~$1.5B), with 40–45% revenue growth guided for FY2026. Roughly $1B of that is expected from BASX.

Source: GM Insights DC Cooling Market report; JLL 2026 Data Center Outlook; Utility Dive (2025 cooling outlook); AAON Q1 2026 earnings call (MarketBeat); JCI Q2 FY26 (Facilities Dive).

Supply — how much can be made, and what limits it

HVAC equipment manufacturing is a mature, competitive industry with deep capacity. Trane, Carrier (CARR), JCI, Lennox, and others operate large global factory networks that can ramp production readily.

Capacity by company

• JCI: has "more than tripled" its physical manufacturing capacity for data-center cooling products through recent investments (Q2 FY26 earnings). Operates a global factory network across Americas, EMEA, and APAC.
• TT (Trane): operates a $17.2B Americas segment with deep manufacturing footprint. Capital expenditures of $383M in FY2025. Applied-equipment book-to-bill was 114%, meaning production is being booked faster than it ships.
• LII (Lennox): acquired Duro Dyne and Supco in October 2025 ($550M) for HVAC parts and accessories. Expanding a new facility in Mexico. Total revenue ~$5.2B; manufacturing is concentrated in the Americas after divesting European operations in Q4 2023.
• AAON: three active manufacturing sites — Redmond (OR), Longview (TX), Memphis (TN, ramping). All three hit record BASX output in Q1 2026. Unabsorbed fixed costs of $9.8M at Memphis show the ramp is still early. CapEx guided at $190M for 2026, mostly directed at Memphis. Management sees capacity "above $2B" in revenue terms once fully ramped.

What limits supply

For traditional air-cooling equipment (chillers, CRAHs, rooftop units), nothing structural limits supply. Raw materials (steel, copper, aluminum, refrigerants) are commoditized, and lead times for standard commercial HVAC equipment are measured in weeks, not the months or years seen in power transformers or GPUs.

The constraint exists at the hybrid/liquid-cooling edge: custom-engineered CDUs, precision liquid-cooling systems, and high-density air handlers designed specifically for AI racks. AAON's BASX and JCI's new CDU/chiller lines are newer products with fewer qualified manufacturing lines. AAON is outsourcing some production to capture near-term demand, which pressures margins but shows supply is the binding constraint for their fastest-growing product line.

Source: AAON Q1 2026 press release; JCI Q2 FY26 earnings.

The gap — demand vs supply, pricing direction

For traditional air-only HVAC: no gap. Supply is ample, competitors are many. The installed base is massive (every existing data center needs maintenance and replacement parts), but new-build demand for air-only designs is declining as a share of total cooling.

For hybrid and data-center-specific cooling: a gap is opening. JCI's 57% Americas systems order growth (driven by hyperscale data centers) and AAON's 2.0x+ BASX book-to-bill ratio show demand outpacing current production capacity. JCI tripled factory capacity and is still guided for only ~6% organic sales growth in FY26, implying the expanded capacity is absorbing an order wall. AAON's 40–45% revenue growth guidance (raised from 18–20% at the start of 2026) reflects accelerating data center demand.

Pricing direction: Commodity HVAC equipment faces flat-to-modest pricing growth (mid-single-digit increases tied to §232 tariffs and raw material inflation, per Lennox). Custom-engineered data center cooling (JCI's York YDAM, AAON's BASX precision units) commands premium pricing — these are specified by hyperscalers with long qualification cycles, creating switching costs once a vendor is designed in. AAON's BASX gross margins were 23.9% in Q1 2026, roughly flat YoY but expected to expand as Memphis ramps and fixed-cost absorption improves. JCI's Americas segment margin expanded 100 bps to 19.5% in Q2 FY26.

Source: JCI Q2 FY26 press release; AAON Q1 2026 press release; Lennox Q1 2026 earnings commentary (HVACRtrends).

The players — how the four compare

Source: StockAnalysis.com (prices as of Jun 3, 2026); JCI Q2 FY26 press release; TT FY2025 press release; LII 10-K FY2025 + Q1 2026; AAON Q1 2026 press release.

Key differences

• JCI is the broadest data-center cooling play — it sells chillers, CRAHs, CDUs, fire suppression (Tyco), and security systems into data centers. It collaborated with NVIDIA on reference designs. Data-center revenue is not broken out; JCI also sells into hospitals, offices, stadiums, and industrial facilities. Total debt is $9.5B.
• TT (Trane) has the strongest free cash flow ($2.9B) in the group. It is benefiting from data-center-adjacent applied-equipment orders but does not disclose a data-center revenue line.
• LII (Lennox) has the least data-center exposure. Its strength is residential HVAC (64% of revenue) and light commercial. Data centers are mentioned once in Q1 2026 filings.
• AAON is the most data-center-concentrated and the highest-growth name. It trades at 104x trailing earnings and is currently free-cash-flow negative due to heavy capex for its Memphis expansion. BASX-branded sales were $229M in Q1 2026 ($900M+ annualized est.), and the $2.1B backlog provides multi-quarter visibility.

The price of exposure

What each price buys: JCI at $90B market cap buys a $24B-revenue diversified building-tech company where data-center cooling is the fastest-growing segment but an undisclosed share of total. TT at $103B buys the largest free-cash-flow generator ($2.9B) in the group with modest data-center exposure. LII at $18B buys the lowest P/E (22.9x) with minimal data-center business. AAON at $12B buys the fastest data-center revenue growth (40–45% guided) and a $2.1B backlog, at 104x trailing earnings and negative free cash flow during a heavy investment cycle.

What the multiples embed: AAON's 104x trailing P/E requires multi-year high-growth in BASX revenue to converge toward a normal earnings yield. If AAON hits $2B+ in revenue at 15%+ operating margins (~$300M+ operating income est.), out-year earnings would be materially higher than the current base. JCI's 45x trailing P/E reflects both data-center momentum and the post-divestiture structure (exited residential HVAC) — management guides ~50% operating leverage on incremental revenue. TT and LII trade on broad commercial HVAC cycle dynamics; data-center cooling is a tailwind, not the primary driver.

Source: StockAnalysis.com; calculated from figures above.

What to deep-dive next

• JCI data-center revenue breakout: JCI does not disclose what percentage of its $24B revenue comes from data centers. The Americas 57% systems-order growth is attributed to hyperscale, but how much revenue has converted? The backlog conversion rate and data-center-specific margin profile are unknown.
• AAON BASX margin trajectory: BASX gross margins are 23.9% during a heavy-investment, outsourcing-aided ramp. What are they at scale with Memphis fully absorbed? The path from negative FCF to positive FCF is the critical financial question.
• Air cooling's residual share in new builds: if air still handles 20–30% of cooling load in hybrid facilities, the tonnage demand per MW for air-side equipment in new builds is roughly 60–120 tons/MW est.. Verifying this from actual hyperscaler build specs would sharpen the demand model.
• Competitive dynamics with liquid-cooling specialists: Vertiv (VRT), nVent (NVT), and Modine (MOD) are the primary liquid-cooling suppliers. Are JCI and AAON winning share from them, or growing the addressable market by serving customers who also need air-side equipment?
• Lennox's positioning: LII has no disclosed data-center product line. Whether it acquires or develops one determines whether it participates in DC cooling growth or remains a residential/light-commercial HVAC play.
• Chiller pricing and differentiation: JCI's York YDAM claims 3.5 MW per unit (20% denser than competitors) and the YK-HT saves 9M gallons of cooling-tower water annually. Do hyperscalers pay meaningfully more for density and water savings, or are chillers commodity-bid?

Sources & confidence