Bank of America’s industrials team just returned from a data center conference in Washington, and the Sept. 17 note it published gives AI infrastructure stock investors a lot to work with.
Demand from hyperscalers such as Microsoft, Amazon, Google, and Meta is holding up, order books of data center infrastructure sellers remain strong, and the biggest cooling and power vendors are still winning orders.
What has become harder is turning approved orders into completed facilities because of permit delays and community pushback.
Analyst Andrew Obin and his team reiterated Buy ratings on the industrial suppliers most exposed to AI capital spending. For anyone holding shares in the sector or considering it, the reason for their read could bring insights to what the group can deliver from here.
BofA reiterates Buy ratings across the data center supply chain
The note reiterated Buy ratings on a specific group: Eaton (ETN), GE Vernova (GEV), Vertiv (VRT), Trane Technologies (TT), Johnson Controls (JCI), Forgent Power Solutions (FPS), and INNIO (INIO). These are the companies that supply the electrical gear, thermal systems, and generation equipment used inside and around new hyperscale AI sites.
Obin’s team wrote that the event confirmed three points its analysts have argued all year. “Demand is still strong, speed to market is the key determinant, and ‘token economics’ remain advantageous,” they said in a BofA Global Research report shared with me.
The analysts also pushed back on quality concerns that had followed Vertiv earlier in the year. “Our sense is that Vertiv is not experiencing quality issues different than the broader industry,” they wrote in the same BofA Global Research report, adding that industry participants pointed to Vertiv’s “premier reputation.”
That commentary directly answers a debate that has followed the stock since its second-quarter revenue miss in late July, when shares fell 17% in a single session.
Bank of America’s industrials analyst team said local opposition and permitting delays have become the biggest risk factor for the AI data center buildout.James Leynse / Getty Images
Permitting delays and community pushback are the new risk
In the same BofA Global Research report, the analysts noted that local opposition to data centers has “become an increased risk factor over the last 6-9 months,” and developers are now responding with public commitments they would not have made a year ago.
Loudoun County, Virginia, which hosts more data centers than anywhere else in the world, advanced a proposed 12-month pause on new applications on Sept. 15, Fox 5 reported. Similar reviews or delays are moving through other counties in Virginia and cities in Georgia, and GE Vernova’s CEO warned about the same trend at the Bernstein conference in May.
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The BofA note explained how CoreWeave is trying to defuse that pushback. “We use less water than a swimming pool, we signed the Ratepayer Pledge so your electricity bill is not going up, and our fans are 40 decibels,” a CoreWeave representative said.
The Ratepayer Protection Pledge, which the White House announced on March 4, asks signatories to fully fund their own power supply and grid upgrades so household bills do not absorb the buildout costs.
Why Vertiv, Eaton, and GE Vernova sit at the center of the AI buildout
Vertiv makes the power distribution units, uninterruptible power supplies, and liquid cooling systems that keep AI servers running and prevent them from overheating. Eaton produces the switchgear and transformers that connect the grid to server racks. GE Vernova supplies the gas turbines and grid equipment that generate and move the electricity.
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The demand for infrastructure is showing up in these companies’ reports.
Vertiv guided full-year 2026 sales to a range of $13.5 billion to $14.0 billion. GE Vernova posted second-quarter revenue of $11.1 billion and a record $176 billion backlog, with Electrification bookings driven directly by data center orders, according to its SEC filing. Eaton has booked roughly $5 billion in year-to-date data center orders in its Electrical Americas segment.
Andrew Obin has covered multi-industry names at BofA for more than a decade, and his team’s ratings on this group have stayed steady through the buildout. That consistency matters when opinions on AI capital spending keep shifting, because it tells investors whether recent pullbacks reflect a real change in the business.
What everyday investors should watch next
The BofA note is a useful signal for investors holding or considering these stocks. The short-term drivers remain the same ones that pushed the stocks higher in the first half of the year, but the risk has changed.
Local opposition can delay projects even when demand and financing are in place, and a single development pause in a hub like Loudoun County can delay backlog conversion by several quarters.
That means the pace at which orders become revenue may become uncertain. Companies with flexible production and modular equipment are better positioned to adjust if the situation shifts toward smaller edge data centers closer to end users.
Newer investors should keep two things in mind. Valuations across the group have already climbed, and Vertiv in particular trades at a premium multiple that leaves less cushion for a missed quarter. AI capital spending also still depends on a small group of hyperscalers whose plans could shift as they compare capacity with revenue.
Vertiv’s CEO has raised concerns about how tight construction timelines have become. This means allocating your capital carefully and having a clear view of your holding period matters more now.
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