AI Infrastructure is Entering a Multi-Year Boom: 4 Stocks to Watch

The AI infrastructure boom driven by massive global and domestic investments in data centers, cloud computing, and compute-intensive AI workloads, is shaping up to be a multi-year theme in India.

This includes hyperscale data center rollouts, power/cooling systems, networking gear, and compute services, all essential for AI adoption.

The “AI Infrastructure Boom” is no longer just a global trend; it has firmly landed in India.

With the Union Budget 2026-27 introducing tax holidays for AI data centers and the India Semiconductor Mission 2.0 receiving fresh allocations, the focus has shifted from software services to the physical “picks and shovels” of the AI era.

To capture this multi-year boom, investors are looking at four key layers of the infrastructure stack…

1. The Data Center & Cloud Backbone

Data centers are the “factories” of the AI age. Indian companies are pivoting from basic server housing to high-density AI-ready facilities.

2. Power & Thermal Management (Cooling)

AI chips run incredibly hot-much hotter than traditional servers. Companies that provide the electricity and the cooling for these chips are critical enablers.

3. Semiconductor Design & Hardware

While India is still building its first fabrication plants (“fabs”), it is already a world leader in chip design and testing.

4. Connectivity & Networking

AI requires massive amounts of data to move instantly between servers. Fiber optics and networking hardware are the “highways” for this data.

Let’s now take a look at 4 such companies that should capture the boom in the AI infra space.

#1 KRN Heat Exchanger and Refrigeration

First on our list is the stock of KRN Heat Exchanger and Refrigeration.

The company is an example of a “pick and shovel” play for the AI boom. While they don’t build AI models, they provide the critical cooling infrastructure.

The company is to move on from traditional HVAC (Heating, Ventilation, and Air Conditioning) into high-performance data center cooling, which is the “hidden bottleneck” of the AI expansion.

KRN Heat Exchanger and Refrigeration specializes in manufacturing fin and tube-type heat exchangers for the HVAC&R industry.

How the AI boom is driving growth at KRN Heat Exchanger and Refrigeration

As per the management, by the end of Q3 FY26, nearly 15% of the company’s revenue was generated solely from data centers.

Over the past two months, KRN Heat Exchanger and Refrigeration has been witnessing a steady influx of significant orders, with some major ones coming exclusively from data centers.

The management anticipates that over the next 3-4 years, data centers will contribute significantly to the company’s overall growth.

The company recently released its Q3 FY26 numbers. During the quarter and across the nine-month period, the company has seen steady progress in its core business, driven by consistent execution and improving order visibility. Demand from both domestic and export customers remained healthy.

KRN Heat Exchanger and Refrigeration reported revenues of Rs 1,532 m vs Rs 1,115 m YoY, showing a jump of 27%.

The net profits too moved higher to Rs 227 m vs Rs 137 m YoY. The company saw gross profit margins improving to 20.5% vs 14.2%, as the company-controlled costs.

During the quarter and the 9-month period, demand was strong across India and major export markets, including the UAE, the US, Canada, and Europe.

Looking ahead, the management says that it’s confident about sustaining this momentum. With a stable order pipeline, expanding export engagements, and continued emphasis on operational efficiency, they believe the business is well positioned to grow steadily and strengthen its revenue base in the coming periods.

In the past five trading sessions, KRN Heat Exchanger and Refrigeration shares have gained to Rs 734 from Rs 669.

The stock touched its 52-week high of Rs 1,009.9 on 5 March 2025 and a 52-week low of Rs 589.75 on 27 January 2026.