Shares of Carrier Global (NYSE: CARR) jumped 10.3% in early trading Thursday after the industrial conglomerate announced a major push into data center cooling technology alongside a new $2 billion share repurchase authorization. The dual announcements signal CEO David Gitlin’s strategy to capitalize on booming AI infrastructure demand while returning capital to shareholders.
The Florida-based company, which spun off from United Technologies in 2020, revealed plans to expand its industry-leading HVAC systems into specialized cooling solutions for hyperscale data centers. Analysts estimate the global data center cooling market will grow to $40 billion by 2030, with AI workloads driving unprecedented demand for energy-efficient thermal management.
‘This is a logical adjacency for Carrier,’ said Morningstar analyst Brian Bernard. ‘Their commercial HVAC expertise translates well to mission-critical cooling systems, where reliability margins are even higher than in traditional buildings.’ The company confirmed pilot projects with three major cloud providers, though names weren’t disclosed due to nondisclosure agreements.
Simultaneously, Carrier’s board approved a $2 billion accelerated share repurchase program, representing nearly 5% of its market capitalization at current prices. CFO Patrick Goris noted the buyback reflects ‘confidence in our cash generation capabilities’ despite recent portfolio restructuring that included selling its Chubb fire security division for $3.1 billion.
Market reaction was overwhelmingly positive, with JPMorgan upgrading the stock to ‘Overweight’ and raising its price target to $75. However, some analysts caution that data center margins may prove thinner than Carrier’s traditional commercial HVAC business. ‘The cooling space is becoming increasingly competitive with specialized players like Vertiv,’ warned Wells Fargo’s Joe O’Dea in a research note.
Looking ahead, investors will monitor Carrier’s Q2 earnings call for details on data center contract wins and whether the buyback signals reduced appetite for further acquisitions following its 2023 purchase of German climate control firm Viessmann.