Shares in Belimo Holding AG surged more than 8% in trading on Wednesday after Morgan Stanley upgraded the stock, citing a significant tailwind from data centre expansion in the 2025 financial year. The Swiss-based manufacturer of actuators and control valves for heating, ventilation, and air conditioning (HVAC) systems saw its stock climb to a fresh high, outperforming broader European indices.
Morgan Stanley analysts raised their rating on Belimo from 'equal-weight' to 'overweight', with a revised price target reflecting the anticipated surge in demand for energy-efficient cooling solutions. The upgrade comes as global technology giants continue to invest heavily in new data centres to support artificial intelligence and cloud computing workloads, which require precise climate control systems.
For UK investors holding European equities or funds with exposure to industrial and engineering stocks, the move underscores a growing theme: infrastructure linked to the digital economy is becoming a reliable growth driver. Belimo's products are critical components in data centre cooling systems, and the company is well-positioned to benefit from the multi-year build-out cycle.
Analysts at Morgan Stanley noted that Belimo's strong market position and recurring revenue from aftermarket services provide a buffer against broader economic uncertainty. 'The data centre segment is expected to contribute meaningfully to revenue growth in FY25, offsetting any potential slowdown in traditional construction markets,' they wrote in a note to clients.
The upgrade also lifted sentiment across the wider HVAC and building automation sector, with peers such as Siemens and Johnson Controls seeing modest gains. However, Belimo remains a pure-play beneficiary, making it a focused bet on the intersection of energy efficiency and digital infrastructure.
Source: Morgan Stanley research note