Bank of America spots major Nvidia-linked stock market setup

Bank of America just identified an Nvidia-linked market setup that’s hiding in plain sight, beneath all the noise investors continue chasing.

Analyst Andrew Obin argues the shift is being driven by Nvidia‘s(NVDA) effectively resetting the timetable for the AI buildout, strengthening the case for key AI infrastructure stocks.

Clearly, Nvidia has been a massive beneficiary of the AI trend, with its stock surging over 1,082% in the past three years. In the past year alone, it jumped over 30% making multiple records in the process.

Obin argues that the market continues to react to the incorrect signals, arguing over cooling efficiency and chip thermals.

In Obin’s view, instead of chasing Nvidia’s next move, investors need to position around the industrial stocks quietly executing on it.

In many ways, Nvidia is effectively setting the AI industry’s clock speed.

So when it decides to switch to the next platform generation, everyone else needs to keep up with their pace.

Hyperscalers need to strategize their deployments, while server manufacturers need to rework their designs. At the same time, data-center builders need to efficiently adjust their power needs, cooling, and networking, along with rack layouts, to effectively match Nvidia’s cadence.

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Things get trickier when factoring in Nvidia’s full-stack moat, which is impossible to escape. Developers write for CUDA first, and then that data flows through NVLink and Nvidia’s networking gear.

For perspective, Nvidia has stated that its robust CUDA ecosystem comprises more than 6 million developers, along with approximately 6,000 CUDA applications.

So once companies commit, it’s virtually impossible to switch. Moreover, the lock-in shows up in AI market share readings, which analysts usually peg at roughly 80% to 85%.

The real opportunity lies not in chasing virtually every AI-related headline, but in owning the industrial “plumbing” that the tech giants rely on in keeping abreast of Nvidia’s constant redesigns, Obin told CNBC. The market, he says, keeps overreacting.

He argues that the market continues reacting to the surface-level chatter (like “less cooling”), even though the build cycle is essentially locked in for the next couple of years.

Obin mentioned two beneficiaries in Trane Technologies and Johnson Controls that could perhaps be the best industrial stocks to ride out the trend.

For both Trane Technologies and Johnson Controls, the robust AI-driven data-center demand is apparent through their swelling backlogs.

For instance, in Q3 2025, Trane Technologies posted a whopping $4.81 billion in bookings, a stellar 12% year-over-year increase, along with $4.66 billion in sales. On top of that, its adjusted operating margin shot up to an enviable 21.8%, underscoring superb pricing power.

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Additionally, demand is stretching out.

CEO David Regnery said Trane has significantly grown its chiller capacity by roughly fourfold since 2023, while lead times are currently at 12 to 18 months.

Also, per its CFO, Trane’s Commercial HVAC Americas backlog has surged to nearly $500 million year over year and will remain elevated into 2026.

Johnson Controls finds itself in a similar position.

It wrapped up FY2025 with a massive $14.9 billion in Systems & Services backlog, up 13% organically, including a remarkable 6% increase in organic order growth in Q4. Management linked that stronger visibility to advanced data-center cooling, including end-to-end thermal management.

Investors noticed in a big way, especially with JCI, which generated a massive 39% gain last year. Trane Technologies, though, didn’t have a great year on the stock market, positioning it as an attractive value stock to track this year.

As Obin points out, the companies that are writing the biggest AI checks are set to benefit immensely.

Meta Platforms, Amazon Web Services, and Alphabet fit the bill as they continue building out massive data-center capacity across multi-year timelines.

• Amazon: Amazon’s CFO recently said that 2025 capex would land around the $125 billion mark, and will be “higher next year,” following a massive $89.9 billion in capex through the first three quarters, linked to AI projects, Reuters reported.

• Meta: Meta bumped its 2025 capex into the $70 billion to $72 billion range and said capex growth will be even larger in 2026, led by AI infrastructure, according to Reuters.

• Alphabet: Google’s CEO Sundar Pichai reiterated plans to spend over $75 billion in 2025 in growing data-center capacity, with expectations that the number will rise further in 2026.

• The backdrop: Reuters reports that Big Tech will be gearing up to spend nearly $400 billion on data centers.

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This story was originally published by TheStreet on Jan 13, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.