Industry Insiders Reveal Soaring Demand for Data-Center Infrastructure Amid AI Boom
The Supercomputing 2025 Trade Show: A Glimpse into the Evolving Data-Center Infrastructure Market
The recent Supercomputing 2025 (SC25) trade show, held from November 16 to November 21, provided a unique snapshot of the data-center infrastructure market’s current trajectory and anticipated developments. As AI workloads intensify and energy demands rise, conversations among attendees highlighted the increasing difficulty in meeting supply needs, rising power and thermal requirements, and shifting technological landscapes.
Accelerating Needs over Speculative Excess
According to Wolfe Research, companies acknowledged an accelerating need for data-center infrastructure rather than speculative excess. Their analysis emphasized several key takeaways from the show floor, refuting concerns of a market bubble at ground level. Executives consistently expressed confidence in expanding pipelines and multi-year visibility, dispelling fears of an overheated industry.
The brokerage recently shared a note to clients, detailing their observations:
"Executives repeatedly pushed back against the idea that the industry is overheating," noted Nigel Coe, Wolfe analyst. "Demand is strengthening (and broadening), pipelines continue to expand, and visibility extends beyond the end of 2028."
Coe contrasted today’s supply buildout with the late-1990s telecom cycle, where current capacity expansions reflect near-term requirements rather than circular financing. Power supply constraints were flagged as a primary bottleneck.
Liquid Cooling Gains Prominence
As high-power GPU adoption accelerates, liquid cooling solutions are increasingly prominent. Coe highlighted that "the migration to NVIDIA GB200 chips has tilted the market fully towards liquid-cooling solutions," centered on single-phase, direct-to-chip technology. The analyst emphasized that two-phase systems remain under development due to density ramps in 2027 and 2028.
Moreover, immersion cooling is largely sidelined due to technical hurdles rather than a shift away from liquid cooling as an option:
"The key takeaway from these discussions is that liquid-cooling adoption will likely increase exponentially in the coming years," Coe explained. "As data centers become more efficient, with thermal density increasing, liquid cooling will be seen as essential."
High Voltage DC Power Gains Momentum
More vendors are preparing to transition from AC to DC rack power, with Vertiv and Eaton leading this charge:
"The early signs indicate that high voltage DC products have significant potential for material efficiency gains," Coe noted. "Rack-level power distribution using 600V and above is gaining pace among major data center operators."
According to analysts, full DC distribution adoption is unlikely until around 2030 as AC power grid infrastructure continues to support DC’s role in high-density applications:
"DC rack power systems will eventually supplant the traditional AC system, fundamentally altering the power delivery chain," Coe added.
Consolidation and Modular Thinking
Several major data center vendors have made strategic acquisitions aimed at strengthening market positions. The brokerage emphasized that this trend is driving the competitive landscape towards more comprehensive, modular solutions for streamlined installation costs:
"The increasing push toward integrated ‘bundled packages’ indicates a willingness among customers to adopt more holistic infrastructure solutions," noted Coe.
Eaton and Schneider’s moves into the data center ecosystem have been particularly notable. While some argue that a focused strategy remains feasible within the current market conditions, the consolidation trend suggests an ongoing shift towards larger, more diverse vendors: "Consolidation isn’t going away anytime soon," Coe stated.
Service Emerges as Key Advantage
Companies emphasized the importance of operational efficiency across primary and secondary cooling loops due to technical complexities tied with liquid-cooling systems. Service has emerged as a significant barrier to entry for operators striving to maintain fluid management capabilities:
"For operators, service emerges as a critical factor in maintaining efficiency," said Coe. "In fact, Vertiv’s scale is especially beneficial – it boasts ~4,400 people servicing data center needs and holds the scale through $1 billion worth of PurgeRite, positioning itself for enhanced fluid-management abilities."
The Best-Positioned Vendors
Wolfe Research highlighted that several top vendors stand to gain significant traction in 2026:
"Vertiv is well-positioned with a diverse lineup of products, including the migration pathways towards high voltage DC rack power offerings and modular components," Coe mentioned.
Additionally, nVent’s rapid product expansion and expanding CDU, PDU capabilities create further upside opportunities for Vertiv. The brokerage noted increased risk-reward profiles among industrial AI stocks but observed that data center vendors like Vesco will continue to lead with earnings growth expectations.
However, it is in this sector where investors could potentially find the most attractive entry points considering an increasingly appealing market:
"For those interested in making an entry point – ETN especially stands out.
Industry Insiders Reveal Soaring Demand for Data-Center Infrastructure Amid AI Boom
The Supercomputing 2025 Trade Show: A Glimpse into the Evolving Data-Center Infrastructure Market
The recent Supercomputing 2025 (SC25) trade show, held from November 16 to November 21, provided a unique snapshot of the data-center infrastructure market’s current trajectory and anticipated developments. As AI workloads intensify and energy demands rise, conversations among attendees highlighted the increasing difficulty in meeting supply needs, rising power and thermal requirements, and shifting technological landscapes.
Accelerating Needs over Speculative Excess
According to Wolfe Research, companies acknowledged an accelerating need for data-center infrastructure rather than speculative excess. Their analysis emphasized several key takeaways from the show floor, refuting concerns of a market bubble at ground level. Executives consistently expressed confidence in expanding pipelines and multi-year visibility, dispelling fears of an overheated industry.
"Executives repeatedly pushed back against the idea that the industry is overheating," noted Nigel Coe, Wolfe analyst. "Demand is strengthening (and broadening), pipelines continue to expand, and visibility extends beyond the end of 2028."
Coe contrasted today’s supply buildout with the late-1990s telecom cycle, where current capacity expansions reflect near-term requirements rather than circular financing. Power supply constraints were flagged as a primary bottleneck.
Liquid Cooling Gains Prominence
As high-power GPU adoption accelerates, liquid cooling solutions are increasingly prominent. Coe highlighted that "the migration to NVIDIA GB200 chips has tilted the market fully towards liquid-cooling solutions," centered on single-phase, direct-to-chip technology. The analyst emphasized that two-phase systems remain under development due to density ramps in 2027 and 2028.
Moreover, immersion cooling is largely sidelined due to technical hurdles rather than a shift away from liquid cooling as an option:
"The key takeaway from these discussions is that liquid-cooling adoption will likely increase exponentially in the coming years," Coe explained. "As data centers become more efficient, with thermal density increasing, liquid cooling will be seen as essential."
High Voltage DC Power Gains Momentum
More vendors are preparing to transition from AC to DC rack power, with Vertiv and Eaton leading this charge:
"The early signs indicate that high voltage DC products have significant potential for material efficiency gains," Coe noted. "Rack-level power distribution using 600V and above is gaining pace among major data center operators."
According to analysts, full DC distribution adoption is unlikely until around 2030 as AC power grid infrastructure continues to support DC’s role in high-density applications:
"DC rack power systems will eventually supplant the traditional AC system, fundamentally altering the power delivery chain," Coe added.
Consolidation and Modular Thinking
Several major data center vendors have made strategic acquisitions aimed at strengthening market positions. The brokerage emphasized that this trend is driving the competitive landscape towards more comprehensive, modular solutions for streamlined installation costs:
"The increasing push toward integrated ‘bundled packages’ indicates a willingness among customers to adopt more holistic infrastructure solutions," noted Coe.
Service Emerges as Key Advantage
Companies emphasized the importance of operational efficiency across primary and secondary cooling loops due to technical complexities tied with liquid-cooling systems. Service has emerged as a significant barrier to entry for operators striving to maintain fluid management capabilities:
"For operators, service emerges as a critical factor in maintaining efficiency," said Coe. "In fact, Vertiv’s scale is especially beneficial – it boasts ~4,400 people servicing data center needs and holds the scale through $1 billion worth of PurgeRite, positioning itself for enhanced fluid-management abilities."
The Best-Positioned Vendors
Wolfe Research highlighted that several top vendors stand to gain significant traction in 2026:
"Vertiv is well-positioned with a diverse lineup of products, including the migration pathways towards high voltage DC rack power offerings and modular components," Coe mentioned.
Additionally, nVent’s rapid product expansion and expanding CDU, PDU capabilities create further upside opportunities for Vertiv. The brokerage noted increased risk-reward profiles among industrial AI stocks but observed that data center vendors like Vesco will continue to lead with earnings growth expectations.
However, it is in this sector where investors could potentially find the most attractive entry points considering an increasingly appealing market:
"For those interested in making an entry point – ETN especially stands out.