Data Center Exposure Boosted HVAC Companies in Q2

The HVAC industry saw robust Q2 performance driven by data center demand and broad commercial tailwinds, leading to high-single-digit to low-double-digit sales growth for companies like Carrier, Johnson Controls, and Trane Technologies. While commercial segments thrived, residential HVAC showed bifurcation, with Lennox and Watsco facing weaker demand and reduced guidance due to consumer anxiety. Despite strong overall performance, most HVAC stocks remain richly valued, though recent declines in Lennox and Watsco could present entry points.