Comfort Systems Is the AI Data Center Stock Beating NVDA, AVGO, & AMDWritten by Leo Miller on October 31, 2025
Key Points- Comfort Systems USA is up more than 130% in 2025, exceeding the returns of NVIDIA, Broadcom, and AMD.
- The company's ventilation and cooling expertise has led to its technology-driven revenues more than tripling in two years.
- Comfort System's high valuation is backed by its strong business, and continued share gains are likely.
It’s well known that rabid investment in artificial intelligence (AI) has led to great performance for many tech stocks in 2025. Chip leaders like NVIDIA (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Advanced Micro Devices (NASDAQ: AMD) have been among the most notable beneficiaries. As of the Oct. 28 close, their shares have returned 50%, 62%, and 114%, respectively.
However, as companies construct data centers to deploy AI chips, many industrial stocks are also riding the wave. Some are even outperforming the chip giants.
Not the least of which is Comfort Systems USA (NYSE: FIX). Its 132% return on the year trounces both NVIDIA and Broadcom and outperforms AMD by a solid margin.
So, what exactly does Comfort Systems do, and why is the stock seeing such impressive gains in 2025? Additionally, how should investors view the potential of this stock going forward? Could it continue posting strong gains, or is its run overextended?
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Comfort Systems Sees Skyrocketing Tech DemandComfort Systems is one of the nation’s leading providers of heating, ventilation, and air conditioning (HVAC). This has put the company in a prime position during the AI data center boom. Running AI workloads produces a lot of heat. Thus, constructing high-quality ventilation and cooling systems is key. The company’s technology end market, which includes data centers, has exploded over the past two years. In the first nine months of 2023, it generated around $808 million in revenue. That figure more than tripled to $2.7 billion in the first nine months of 2025.
One way the company has gained an advantage in attracting data center customers is through modular construction. It pre-builds many of its systems in centralized factories, customizing them to the specific needs of each customer facility. Comfort Systems says this method allows for up to 40% less time spent on preparation and construction. This reduces costs and allows data centers to get online faster. As hyperscalers race to build the most intelligent AI models, Comfort Systems' speed is a key reason to work with them.
Comfort System’s Q3 Blows Markets AwayComfort Systems' Q3 earnings release on Oct. 23 led to fireworks. Shares closed up by a whopping 19% the next day as the company smashed expectations. Revenue soared by 35.2% to $2.45 billion, far eclipsing estimates of 19% growth. Earnings per diluted share came in at $8.25, rising 102%, much higher than the 54% growth forecasted. Adjusted operating margin rose to 15.5%, up 430 basis points from a year ago, and up 170 basis points versus Q2.
However, the company’s most impressive metric was its record backlog of $9.4 billion, an increase of 65%. That is around 7% higher than the $8.8 billion in revenue that analysts expect the firm to generate in all of 2025. This indicates that demand continues to accelerate, a highly positive sign going forward.
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Wall Street Has Mixed Views on FIX's FutureThe MarketBeat-tracked consensus price target on Comfort Systems of around $819 may alarm investors, as it implies more than 16% downside potential versus the stock’s Oct. 28 closing price. However, recent price target updates paint a more optimistic picture. Among forecasts updated after the company’s Oct. 23 earnings release, the average target is around $1,006, implying 3% upside. While not significant, it at least helps justify the huge rise in Comfort Systems' shares.
Notably, the range of upside and downside forecasts in Comfort Systems is relatively balanced. DA Davidson’s $810 target indicates around 17% downside, while UBS’s $1,140 target implies 16% upside. This significant range creates uncertainty about what may happen next.
Comfort Systems trades at a forward price-to-earnings (P/E) ratio of around 33.5x, near the stock’s all-time high level and around 40% above its three-year average of 24x. Clearly, the stock doesn’t look cheap. However, its impressive growth, huge backlog, and outstanding margin expansion are hard to ignore.
FIX also continues to invest in modular manufacturing capacity. It says it will have around 3 million square feet of modular manufacturing space in early 2026. That would be up significantly from the 2.5 million square feet it had in Q1 2025. This expansion is a key signal of confidence for future demand.
With data center buildouts in full swing, Comfort Systems USA seems like a momentum stock that can keep its impressive run going. Still, expectations are now as high as ever for this name. This could lead to a future earnings miss, triggering a significant pullback and a more attractive entry point.
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