Nvidia's Water-Cooled Chip Announcement Affects Data Center Cooling Stocks
Shares of data center cooling system suppliers fell sharply following Nvidia CEO Jensen Huang's announcement of the water-cooled Rubin chip, which could reduce reliance on traditional cooling units. While analysts anticipate long-term uncertainty regarding demand for cooling systems, short-term impacts are viewed as limited; Trane Technologies' stock dropped 2.5%, Modine Manufacturing fell 7.5%, and other companies like Johnson Controls and Carrier also experienced declines.
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Shares of companies supplying cooling systems for data centers dropped sharply following statements from Nvidia CEO Jensen Huang. At CES, Huang announced that the upcoming Rubin chip can be cooled with water at temperatures that do not require traditional cooling units.
Analysts now see increased uncertainty regarding long-term demand for cooling units as liquid cooling becomes more common, although short-term effects are assessed to be limited. Trane Technologies saw a decline of up to 10% but closed down 2.5%, while Modine Manufacturing experienced a drop of around 20% at its lowest point, closing down 7.5%. Johnson Controls and Carrier also saw declines.
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