Madison Air Solutions stock has popped more than 50% since its April initial public offering, and has more in the tank as a data center boom linked to artificial intelligence will continue to power a rally, according to Bank of America. The bank, one of several book-running managers on the IPO, initiated research coverage of the HVAC provider with a buy rating and 12-month price target of $47, implying 12% upside from Friday's close. "Madison Air has strong market share in niche HVAC markets, a solid operational focus and a residential business that is not tied to industry shipments," analyst Andrew Obin said Monday in a note to clients. "It serves a $40bn market distinct from the $200bn global HVAC industry with room ... to grow on the strength of brands including Nortek Data Center Cooling and Big Ass Fans." The company, which serves data facilities that provide the infrastructure for AI, debuted on the New York Stock Exchange on April 16 after raising about $2.2 billion in its IPO. The offering was priced at $27 a share and Madison Air was trading Monday close above $42. The Chicago-based company offers heating, ventilation and air conditioning systems to regulate indoor air quality and temperatures. A major focus of its business is serving AI infrastructure facilities that rely on stable thermal conditions to ensure equipment performs efficiently and doesn't overheat. Recently, plans for data center buildouts have accelerated as growing adoption of large language models such as Chat GPT stokes demand for the infrastructure that undergirds them. Last year, more than $60 billion was pledged to build data centers that power AI solutions. Bank of America is one of several banks on Wall Street that have recently initiated research coverage of Madison Air following the usual quiet period . Citigroup, Barclays and Wells Fargo gave overweight or buy ratings to Madison Air, while Goldman Sachs issued a neutral rating. Goldman Sachs, Barclays, Jefferies and Wells Fargo were lead underwriters of the Madison Air IPO.
