Cooling company, hot IPO

Forget SpaceX, Anthropic, OpenAI, and all those other upcoming tech IPOs that investors are salivating over—the hottest public debut of the year may very well be an air conditioning company.

Madison Air Solutions manufactures ventilation and air filtration systems, which isn’t exactly as exciting as AI or spaceships. But Madison is the largest industrial IPO to hit the market since UPS debuted in 1999, and investor hype was enough to sustain the $2.23 billion offering and propel shares 17.67% higher on their first day of trading today.

Picks and shovels

It’s easy to say you should forget about tech, but even Madison Air can’t escape the long reach of the AI trade. Investors are betting that the company is a smart play on AI infrastructure, with Madison providing an essential service to tech companies: cooling their servers straining under AI workloads in data centers.

Those data centers are springing up all over the country (well, except in Maine), which should provide Madison with plenty of lucrative contracts in the years ahead. When you combine its growing commercial business segment with its traditional housing business, Madison expects it can tap into a $40 billion addressable market in North America alone.

Ever-growing demand for data centers, coupled with the company’s 27.3% YoY revenue growth and the fact that it’s founder-led, may make Madison the next hot picks and shovels play in the AI trade.—MR