Bank of America has highlighted a significant investment opportunity linked to Nvidia as the tech giant continues to shape the artificial intelligence (AI) landscape. Analyst Andrew Obin believes that Nvidia’s recent strategic shift is creating a favorable environment for key infrastructure stocks that support the AI buildout. With Nvidia’s stock soaring over 1,082% in the past three years, the company has positioned itself as a crucial player in the AI sector, experiencing a more than 30% increase in the past year.
Obin asserts that many investors are misinterpreting market signals, focusing on superficial concerns such as cooling efficiency and chip thermals rather than recognizing the underlying trends. He suggests that investors should pivot away from merely tracking Nvidia’s stock movements and instead consider investing in the industrial companies that are executing the necessary groundwork for AI infrastructure development.
Nvidia as the Industry Leader
Nvidia is effectively setting the pace for the entire AI industry. When the company transitions to a new platform generation, other players must adapt quickly to remain competitive. This includes hyperscalers strategizing their deployments, server manufacturers redesigning their products, and data center builders adjusting their power and cooling systems to align with Nvidia’s innovations.
The scope of Nvidia’s influence is underscored by its comprehensive ecosystem, which includes more than 6 million developers engaged with its CUDA programming model. This extensive network has resulted in approximately 6,000 applications being built on the platform, making it difficult for companies to switch to alternative solutions once they have committed to using Nvidia’s technology. Market analysts estimate that Nvidia holds a commanding 80% to 85% share of the AI market.
Industrial Partners Poised for Growth
Obin emphasizes that the real investment potential lies in the industrial companies providing essential infrastructure—often referred to as the “plumbing”—that tech giants rely on to keep pace with Nvidia’s advancements. He points to companies like Trane Technologies and Johnson Controls as prime beneficiaries of the increasing demand for AI-driven infrastructure. As the market reacts to short-lived headlines, these firms are quietly strengthening their positions.
For instance, in the third quarter of 2025, Trane Technologies reported an impressive $4.81 billion in bookings, marking a 12% year-over-year increase. Their sales reached $4.66 billion, and the company achieved an adjusted operating margin of 21.8%. Trane’s CEO, David Regnery, noted that the company has expanded its chiller capacity fourfold since 2023, with lead times stretching to 12 to 18 months.
Similarly, Johnson Controls concluded its fiscal year 2025 with a substantial $14.9 billion backlog in Systems & Services, reflecting a 13% organic growth. The company reported a 6% increase in organic order growth in the fourth quarter, attributing this success to advancements in data center cooling technologies.
The largest tech companies investing heavily in AI are also expected to reap significant benefits. Meta Platforms, Amazon Web Services, and Alphabet are leading the charge in expanding their data center capacities. For example, Amazon’s Chief Financial Officer recently indicated that the company’s capital expenditures for 2025 could reach approximately $125 billion, following an already high spending of $89.9 billion in the first three quarters, primarily for AI-related projects.
Meta has also increased its capital expenditure forecast for 2025 to between $70 billion and $72 billion, with further growth anticipated in 2026. Meanwhile, Alphabet’s CEO, Sundar Pichai, confirmed plans to allocate over $75 billion in 2025 to enhance data center capacity, with expectations of increased investment in the following year.
Overall, the backdrop indicates that major players in the tech industry are expected to spend nearly $400 billion on data centers, highlighting the critical role of infrastructure providers in the ongoing AI revolution. As the AI landscape continues to evolve, investors may find more stability and growth potential in these foundational companies rather than in chasing fleeting trends associated with Nvidia’s stock.
