Trane Technologies reports record backlog as AI data centre demand surges
HVAC manufacturer raises outlook, projecting Stellar Energy division could reach $1 billion revenue within three years amid pivot in AI infrastructure.
Trane Technologies (NYSE:TT) has reported a record backlog of $10.7 billion for the first quarter, driven by a 24% increase in enterprise organic bookings. The manufacturer of heating, ventilation, air conditioning (HVAC) and cooling systems noted that its Applied Solutions division saw bookings surge by more than 160%, a spike attributed to rising demand for thermal management systems in artificial intelligence data centres.
The company raised its financial outlook, with management projecting that its Stellar Energy division could become a $1 billion business within the next two to three years. Stellar Energy specialises in designing and building large-scale cooling and energy infrastructure for hyperscale data centres, including modular chiller plants and central utility plants. This growth comes as the AI infrastructure industry undergoes a strategic pivot from model training to inference, altering the requirements for data centre cooling and energy systems.
Trane Technologies manufactures HVAC and cooling systems for both commercial buildings and data centres. Its product portfolio includes chillers, cooling plants, air handling systems, and ventilation equipment. The surge in Applied Solutions bookings reflects the increasing need for energy-efficient cooling in large facilities such as factories, hospitals, airports, and office buildings, alongside the specific thermal demands of AI computing.
The record backlog of $10.7 billion represents an increase of more than 30% from the end of 2025. This backlog underscores the sustained demand for Trane’s commercial HVAC and data centre business solutions. The company’s ability to scale its Stellar Energy division is viewed as a significant growth catalyst, given the expanding footprint of hyperscale data centres required to support AI workloads.
While Trane Technologies ranks ninth on a list of 'pick and shovel' AI stocks curated by Yahoo Finance, the source notes that short interest in the company stands at 1.7%. The publication also suggests that while Trane has potential, other AI stocks may offer greater upside and less downside risk, referencing a separate report on short-term AI stocks and onshoring trends.
