The rapid expansion of artificial intelligence (AI) infrastructure is broadening the scope of the AI investment boom, moving beyond chipmakers and large electrical equipment firms deeper into the supply chain. A group of European industrial and chemical companies that produce vacuum pumps, heat exchangers, liquid cooling systems, and specialty gases are emerging as under-the-radar winners in the AI wave, offering investors a new avenue to diversify away from traditional, high-concentration AI stocks.
After a global pullback in AI-themed stocks over the past few months, market interest in AI investments is heating up again. However, unlike the previous frenzy centered on chips and data center power equipment, investors are now scouring the AI supply chain for growth segments that have yet to be fully exploited. George Featherstone, an analyst at Barclays, noted, "After the global AI stock correction in recent months, investors are keen to re-enter the space, seeing the robust underlying demand. But they are actively searching for new opportunities beyond the obvious, well-known names."
AI Demand Trickles Down the Supply Chain: Vacuum Equipment and Specialty Gases Gain Momentum
Swedish industrial group Atlas Copco is a prime example of this trend. Its vacuum technology division supplies vacuum pumps and exhaust gas management systems to semiconductor manufacturers. After a sales decline last year, the division is projected to grow by 19% this year, outpacing all other business segments within the group. Many semiconductor manufacturing processes must be conducted in highly controlled vacuum environments. As AI chip production capacity and advanced process investments expand, demand for related vacuum equipment is climbing.
The French industrial gas giant Air Liquide is also benefiting directly from semiconductor expansion. Its electronics business unit, which provides industrial and specialty gases for chip manufacturing, is expected to be one of the company's top performers this year. Berenberg analyst Sebastian Bray estimates that roughly 40% of Air Liquide's current order book is tied to AI-related electronics. He commented that for most industrial and chemical companies, AI is merely a favorable growth tailwind, but for a select few, its impact is already far more significant.
German chemical firm Wacker Chemie is one of the world's largest producers of semiconductor-grade polysilicon, giving it a direct stake in the semiconductor manufacturing chain. This indicates that demand from AI capital expenditure is no longer confined to GPUs, servers, and electrical equipment, but is progressively filtering down to more foundational elements like vacuum systems, materials, and industrial gases required for chip fabrication.
Data Center Liquid Cooling Heats Up: Heat Exchanger and Valve Manufacturers Become New Beneficiaries
Beyond semiconductor manufacturing, the architecture of next-generation AI data centers is creating new demand for industrial equipment. As AI server computing density and power consumption rise, traditional air-cooling methods are becoming inadequate for heat dissipation, boosting the importance of liquid cooling technology. Goldman Sachs analyst Daniela Costa stated that investors are now more meticulously seeking companies with exposure to liquid cooling, a trend that could benefit the Swedish industrial group Alfa Laval. Alfa Laval's energy division supplies liquid cooling systems and heat exchangers to data centers, which is expected to be a major growth driver for the company in 2026.
Valve and building control equipment manufacturer Belimo Holding is also garnering attention. The company produces valves for liquid cooling systems. Featherstone emphasized that these liquid cooling valves are "extremely critical" for data center operations, and their importance should not be underestimated.
Simultaneously, demand from AI data center construction is spreading to a wider range of industrial sectors. For instance, paint manufacturer Sherwin-Williams, which provides fire-resistant coatings and resin flooring for data centers, is also an indirect beneficiary of the server facility construction boom.
AI Growth Offsets Weakness in Other Markets for Industrial Firms
The significance of AI-related business also lies in its ability to help some European industrial and chemical companies counterbalance pressure from weak demand in other end markets, such as residential, automotive, and traditional industrial manufacturing. With the recovery in traditional business still uncertain, companies are proactively channeling more capital into high-growth areas like data centers and semiconductors. Air Liquide has invested over $170 million to supply a semiconductor factory owned by SK Hynix in Indiana, USA. British chemical company Johnson Matthey acquired Comertech in May to meet the growing power generation demand from US data centers. Bray noted that chemical companies have been operating in a weak demand environment for some time, making them naturally more inclined to invest capital in sectors like data centers with clear growth prospects.
AI Investors Begin Searching for "Second-Layer" Opportunities
The shift in market focus also reflects the maturing of the AI trade itself. In recent years, GPU manufacturers, semiconductor companies, and data center power equipment suppliers have been the most direct AI investment targets. As these areas have attracted significant capital, investors are now digging deeper into the downstream supply chain. Featherstone posed the central question for investors: "Within the next layer of the supply chain, which sectors possess the strongest growth?" This trend is driving increasing attention to industrial products like vacuum pumps, industrial gases, liquid cooling heat exchangers, and critical valves—items not traditionally considered core AI assets.
Reducing AI Portfolio Concentration: Traditional Industrial Stocks Offer an Alternative Path
While AI infrastructure capital expenditure is expected to remain high in the medium term, the investment cycle may eventually slow and plateau. Goldman Sachs' Costa believes that some industrial and chemical companies are not solely reliant on AI business, which can help investors avoid over-concentrating their portfolios in the AI theme. For example, investing in Atlas Copco provides indirect exposure to AI capital expenditure while also offering access to multiple traditional industrial end markets. Some of these industries are currently at the bottom of their cycle and hold potential for future recovery. Featherstone views such companies as offering a "second-order exposure" to AI capital expenditure: they benefit from AI infrastructure buildout but are not entirely dependent on a single investment cycle like pure-play AI firms. As the market reassesses investment opportunities in the AI supply chain, investors are gradually shifting from the most direct chip and data center equipment makers towards the hidden suppliers behind semiconductor manufacturing, cooling, materials, and industrial infrastructure. Once relatively low-key businesses like vacuum equipment, liquid cooling systems, heat exchangers, and specialty gases are becoming new growth engines for traditional European industrial companies to tap into the global AI capital expenditure boom.
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