3 HVAC Stocks to Watch as Heating & Cooling Demand Accelerates

The Zacks Building Products–Air Conditioner & Heating industry ranks #98, in the top 40% of more than 250 industries, with 2026 and 2027 aggregate EPS estimates rising to $5.16 from $5.09 and $5.94 from $5.93, respectively. Data-center cooling, electrification and replacement demand support the outlook, while weak housing demand, tariffs, freight and capacity start-up costs pose headwinds; the industry fell 5.7% over the past year, versus an 11% decline for the construction sector and an 11.5% gain for the S&P 500. Comfort Systems’ 2026 EPS estimate rose to $49.12 from $48.58, with estimated growth of 70.1%; SPX Technologies’ rose to $8.48 from $8.41, and Carrier’s to $2.87 from $2.82.

Analysis

The key distinction is who captures data-center spending: Comfort Systems USA is more directly exposed to project installation and execution, while Carrier and SPX Technologies sell equipment and controls. That creates different risks. Contractors can benefit earlier from project backlogs, but labor availability, project timing and execution can turn visible demand into margin volatility. Equipment makers may gain from capacity and product mix, yet face utilization costs and price-cost leakage. Liquid cooling also means the data-center opportunity is not a simple volume uplift for conventional HVAC: system design shifts could redirect value toward specialized cooling and controls suppliers.

Near term, expectations may matter more than the favorable industry narrative. Comfort Systems’ strong share performance and sharp earnings growth projection leave less room for execution slippage; SPX Technologies’ weaker share performance alongside modest estimate increases could offer relative-value potential, but its broader business mix makes it an imperfect data-center proxy. The article provides no company-level valuation or segment backlog data, so a valuation-driven call is premature. Over 6–18 months, the thesis depends on converting announced capacity and customer projects into utilization, cash generation and durable service revenue—not merely bookings.

Main downside catalysts are data-center project deferrals, a shift in cooling architecture, labor or component constraints, and tariffs that cannot be passed through. Housing weakness is a separate drag, particularly for residential equipment exposure. The industry’s near-market multiple does not itself establish cheapness or upside.

Key Decisions for Investors

• Prefer a watchlist over a sector-wide momentum trade. Before adding exposure, verify company-level data-center backlog conversion, cancellations, segment margins and capacity utilization in the next earnings reports.
• Consider a small, valuation- and beta-adjusted long SPX Technologies / short Carrier Global relative-value position only if SPX Technologies’ data-center order growth and margin conversion remain firm while Carrier’s residential or price-cost trends disappoint. This is a conditional setup, not a clean pure-play pair; exit if SPX Technologies’ order momentum weakens or Carrier’s segment results outperform expectations.
• For Comfort Systems USA, avoid chasing strength solely on backlog or estimate revisions. Reassess after results: rising backlog with stable or improving project margins supports the thesis; margin deterioration, weaker bookings or evidence of delayed customer projects falsifies it.
• Track hyperscaler and colocation capex plans, cooling-system mix (including liquid cooling), tariff pass-through and residential replacement demand over the next 1–3 months; these are more useful catalysts than the broad industry ranking.