Madison Air Solutions Inc.’s stock has soared more than 50% since its initial public offering in April, and the company is piling up more money as the data center boom related to artificial intelligence continues to fuel the rally, Bank of America said. The bank, one of several bookrunning managers for the IPO, initiated research coverage on the HVAC provider with a buy rating and a 12-month price target of $47, implying a 12% upside from Friday’s closing price. “Madison Air has strong market share in the niche HVAC market, solid business operations and a residential business that is not tied to industry shipments,” analyst Andrew Aubin said in a note to clients Monday. “The company serves a $40 billion market that is distinct from the $200 billion global HVAC industry, and has room to grow on the strength of brands like Nortek Data Center Cooling and Big Ass Fans.” The offering price was $27 per share, and Madison Air was trading at more than $42 per share at Monday’s close. The Chicago-based company provides heating, ventilation and air conditioning systems to regulate indoor air quality and temperature. The primary focus of the company’s business is serving AI infrastructure facilities that rely on stable thermal conditions to ensure equipment operates efficiently and does not overheat. Recently, data center expansion plans have accelerated due to increased adoption of large-scale language models such as Chat GPT, and increased demand for the supporting infrastructure. Last year, more than $60 billion was pledged to build data centers to power AI solutions. Bank of America is one of several Wall Street banks that recently began investigative reporting on Madison Air after a period of usual silence. Citigroup, Barclays, and Wells Fargo have assigned overweight or buy ratings to Madison Air, while Goldman Sachs has issued a neutral rating. Goldman Sachs, Barclays, Jefferies, and Wells Fargo served as lead underwriters for Madison Air’s IPO.
