Al boom mints new winners you've never heard of

Gold rushes yield two types of fortunes: those who discover the gold and those who provide the tools. The AI industry has followed that pattern closely. Investors who overlooked Nvidia (NVDA) turned to "picks and shovels" companies, supplying power and cooling for data centers. This strategy proved successful, but then became oversaturated, punishing those who were late to the game.

Vertiv Holdings (VRT), a leading data center thermal management firm, now trades below its all-time high set on May 14. In response, investors are now seeking AI winners in the next layer of the supply chain, focusing on companies manufacturing vacuum pumps, heat exchangers, and ultra-high purity gases. These unglamorous components are essential for semiconductor fabrication, which essentially requires a highly pressurized environment for its processes.

ASML, a leading provider of photolithography tools, reported a strong demand for its extreme ultraviolet capacity, indicating the importance of these upstream components. The scale of the industry is evident in ASML's 30% increase in low numerical aperture extreme ultraviolet capacity for 2027. The same principle applies to data center construction, where cooling is a well-understood component, while the less visible but equally important fab side of the equation consists of consumables like pumps, gases, and abatement systems.

European manufacturers of vacuum pumps, heat exchangers, and specialty gases have emerged as lesser-known beneficiaries of the AI boom. Atlas Copco (ATLCY), a Swedish industrial group, saw a 59% increase in organic order growth in its Vacuum Technique division, which supplies pumps and exhaust management systems to chipmakers. Linde (LIN) also reported strong performance in the gas side, with electronics sales up 18% year over year and a record backlog of gas contracts.

The AI-driven demand for these advanced components is expected to persist, making these companies valuable long-term investments.