A single high-density AI server rack now throws off more heat than a home furnace, multiplied across tens of thousands of racks in a single data center. Modine Manufacturing Company (NYSE: MOD) and AAON, Inc. (Nasdaq: AAON) both figured out how valuable that problem is and re-rated hard because of it. Three much smaller companies are betting they can do the same thing, from three different angles, and only one of them is having an easy time of it.
Modine and AAON Already Proved the Thesis
Modine spent decades as an automotive and industrial heat-transfer company before data center cooling took over its growth story. In fiscal 2026, its Climate Solutions segment grew revenue 43 percent, and within that, data center sales surged 73 percent to cross the 1.1 billion dollar mark. The company signed a long-term capacity agreement worth more than 4 billion dollars with a single strategic customer, covering 2027 through 2029, and is now spinning off its legacy Performance Technologies unit into a combined company with Gentherm so the remaining business can operate as a pure-play climate and data center cooling company.
AAON tells a similar story through a different acquisition. Its BasX Solutions unit, acquired in 2021 for a business generating roughly 70 million dollars in revenue, has become the company’s primary growth engine: BASX-branded sales rose 72.4 percent year over year to 228.6 million dollars in the first quarter of 2026, and backlog more than doubled to 2.13 billion dollars. Management raised full-year revenue growth guidance from 18 to 20 percent up to 40 to 45 percent. AAON’s stock still fell after that announcement, a reminder that even a genuine growth story can trade on execution risk and valuation once the market has already priced in a lot of good news.
Both companies are now worth billions, Modine near 6.9 billion dollars and AAON near 11.5 billion. They are the evidence that the underlying problem, heat, is worth real money to solve.
Why AI Racks Turned Cooling Into an Infrastructure Constraint
Rack power densities have moved past 100 kilowatts as GPU clusters have gotten denser, a level that conventional air cooling struggles to handle efficiently. Direct-to-chip liquid cooling, rear-door heat exchangers, and immersion cooling have each moved from proof-of-concept status to mainstream deployment as a result. MarketsandMarkets puts the global data center liquid cooling market at 4.07 billion dollars in 2026, projected to reach 27.65 billion dollars by 2033.
The public market has relatively few small, pure-play liquid cooling companies to invest in directly. Several of the most credible private specialists have already been acquired by much larger industrial buyers: Eaton bought Boyd Thermal, Trane bought LiquidStack, and Ecolab agreed to buy CoolIT. That leaves a genuine gap one or two layers below the Modine and AAON scale, where the three companies below are trying to establish themselves before the same consolidation wave reaches them.
TSS, Inc. (Nasdaq: TSSI): Integrating the Racks Rather Than Cooling Them Directly
TSS occupies a different layer of the stack than Modine or AAON. It does not manufacture cooling hardware. It designs, builds, and integrates the physical racks and facilities that AI computing runs inside, including direct liquid-cooled rack integration, which puts it adjacent to the cooling story rather than at its center. The company is a genuine micro-cap, trading around 240 to 275 million dollars in market capitalization.
Second-quarter 2026 revenue was 35.1 million dollars, down 20 percent year over year, but that decline was concentrated entirely in lower-margin procurement work. Systems Integration revenue grew 46 percent and Facilities Management grew 84 percent, the two segments management is actively steering the business toward. TSS reaffirmed adjusted EBITDA guidance toward the upper end of 20 to 22 million dollars and disclosed a 17 million dollar investment tied to Nvidia’s next-generation Vera Rubin platform. Despite the AI infrastructure theme working in its favor, the stock is down roughly 37 to 61 percent over the past year, a gap between the narrative and the share price that is either an opportunity or a warning depending on whether the mix shift toward higher-margin work continues.
KULR Technology (NYSE American: KULR): A Real Cooling Product, a Rough Quarter, and a Bitcoin Detour
KULR’s core business is carbon-fiber thermal management technology originally developed for battery safety in aerospace and defense applications, now extended into a product called Xero VibeFan, marketed specifically as a cooling solution for AI server farms and data centers. That gives it a genuine, if narrower, connection to the AI heat problem than a company like TSS.
The most recent quarter was not a good one. Second-quarter 2026 revenue came in at just 2.1 million dollars with a gross loss, a result Yahoo Finance described plainly as disappointing. The company is also unwinding a Bitcoin mining and digital asset segment it had run alongside its core thermal business, refocusing on battery and thermal operations while working through management transitions. KULR is a genuine micro-cap, with a market capitalization that has swung between roughly 100 million and 175 million dollars over the past year, and analyst price targets averaging 8 to 10 dollars sit far above a stock trading in the low single digits, a spread that reflects real disagreement about whether the core thermal business can be separated cleanly from the parts of the company that underperformed.
Innventure (Nasdaq: INV): The Most Direct Technology Match, and the Freshest Setback
Innventure’s Accelsius subsidiary is the closest thing on this list to a direct technology peer of Modine’s and AAON’s cooling businesses. Its two-phase, direct-to-chip liquid cooling technology is purpose-built for the same heat problem driving Modine’s and AAON’s growth, and in March 2026 Accelsius unveiled the NeuCool IR150 at Nvidia’s GTC conference, a system integrating a coolant distribution unit directly into the server enclosure to deliver 150 kilowatts of cooling capacity in a single rack.
Then came a genuinely rough quarter. In mid-August 2026, Innventure suspended its previously communicated 2026 revenue and cash flow guidance for Accelsius, citing evolving AI infrastructure market conditions including power availability, GPU access, and deployment timing, and removed a specific customer site from its forecast. The stock fell 45 percent after hours on the news. Roth Capital cut its price target from 16 dollars to 6 while keeping a Buy rating, and Northland cut its target from 13 dollars to 5 while keeping an Outperform rating, both firms signaling that they still believe in the underlying technology even after resetting their near-term numbers sharply lower. Innventure held 41.5 million dollars in cash as of the most recent quarter, with a market capitalization of roughly 250 million dollars.
Key Risks: Three Different Problems, Not One Shared Risk
TSS’s growth is concentrated in a mix shift away from procurement revenue toward higher-margin integration work, and that shift has to keep working for the current valuation gap between the stock price and the AI infrastructure narrative to close. A reversal back toward procurement-heavy revenue would undercut the thesis directly.
KULR’s Bitcoin mining wind-down removes a source of both revenue volatility and balance sheet complexity, but it also means the company’s near-term financial results reflect a business in transition rather than a clean read on the core thermal technology’s commercial traction. The gap between analyst price targets and the current share price is a signal that this uncertainty is priced into the stock, not evidence that the targets are correct.
Innventure carries the most binary risk of the three. Accelsius’s technology has real hyperscaler-facing credibility, evidenced by the Nvidia GTC unveiling, but the August guidance suspension shows how quickly early-adopter deployment timelines can slip when a single customer site falls out of the forecast. A company this early in commercialization does not have enough deployed volume yet to absorb that kind of setback without it showing up dramatically in the stock.
All three companies operate in a market where much larger, better-capitalized players, Modine, AAON, Vertiv, Eaton, and others, are actively acquiring the private specialists that might otherwise have competed with them directly. That consolidation wave could eventually target any of these three, which would be a favorable outcome for shareholders in an acquisition but removes the standalone growth story that is the actual investment case today.
None of the three should be evaluated as a scaled-down Modine or AAON. Each occupies a genuinely different part of the value chain, carries a genuinely different balance sheet and operating history, and the size of the eventual market opportunity does not guarantee that any specific one of the three captures a meaningful share of it.
Forward-Looking FAQ
Likely yes. The bull case for TSS depends on higher-margin integration and facilities work continuing to outgrow the declining procurement segment, and a reversal of that trend would weaken the thesis directly.
A quarter with clean gross margin in the thermal and battery segments, without a Bitcoin-related line item distorting the results, would be the clearest signal that the transition is complete.
Unclear. Management attributed the suspension to broader AI infrastructure market conditions rather than a problem specific to the technology, but the loss of a named customer site suggests at least some of the delay is deal-specific rather than purely macro.
Meaningfully, given how active Eaton, Trane, and Ecolab have been acquiring private cooling specialists. None of the three has announced any acquisition discussions, but the sector’s consolidation pattern makes it a realistic scenario worth watching for all three.
That depends on differentiation. Modine and AAON compete largely on manufacturing scale and hyperscaler relationships; the three smaller companies here are betting on specific technology or integration niches that scale differently, but none has yet proven it can defend that niche against larger, better-funded competitors entering the same space.
Sources
- SEC EDGAR: Modine Manufacturing Co, Form ARS, Fiscal Year 2026 Annual Report
- Yahoo Finance: Record backlog and raised 2026 guidance put AAON’s data center growth story in focus
- Yahoo Finance: TSS, Inc. (TSSI) stock price, news, quote and history
- Yahoo Finance: KULR Technology Group, Inc. (KULR) stock price, news, quote and history
- Benzinga: Innventure (INV) stock falls 45% after hours, what’s going on
- StockTitan: Innventure suspends 2026 targets as two-phase cooling takes focus
- Insider Monkey: 10 best small-cap data center cooling stocks to buy
Editorial Disclosure
This article is based entirely on publicly available information including company disclosures, government publications, industry research, and named financial and news publications. Publicly traded securities discussed include TSS, Inc. (Nasdaq: TSSI), KULR Technology Group, Inc. (NYSE American: KULR), and Innventure, Inc. (Nasdaq: INV). Modine Manufacturing Company (NYSE: MOD) and AAON, Inc. (Nasdaq: AAON) are discussed and explicitly disclosed as having grown beyond the small and microcap range that otherwise defines this article’s roster, included for comparative and historical context only and not as investment subjects of this article. This article covers US-listed securities only; no TSXV or CSE-listed companies with comparable data center thermal management exposure were identified despite standing sourcing preference for those exchanges where the sector allows it. Eaton Corporation, Trane Technologies, Ecolab, Vertiv, and Nvidia are referenced for context only and are not otherwise covered here. aktiego.com has not received any compensation from any company mentioned, their management, investor relations representatives, or any third party in connection with this article. No staff member or principal of aktiego.com holds a position in any security mentioned at the time of publication. Financial figures, share prices, and market capitalizations are sourced from named company disclosures and financial data providers as cited in the sources section above and reflect data available as of approximately September 1, 2026; figures are subject to change and should be independently verified before any investment decision. KULR Technology’s historical Bitcoin mining and digital asset segment is disclosed as a distinct, separate business line from its core thermal management business, carrying its own distinct risk history. Investing in early and development-stage technology and industrial equities involves operational, financing, technological, competitive, and liquidity risk, including the risk of total loss of capital. aktiego.com is not a registered investment advisor. Nothing in this article constitutes financial, investment, or professional advice. Readers are encouraged to conduct their own due diligence and consult a qualified financial advisor before making any investment decisions. For more information please see our full DISCLAIMER.
