New York, Jan 6, 2026, 20:13 (EST) — Market closed
- Johnson Controls shares closed down 6.2% after Nvidia’s CEO said upcoming chips could cut data-center cooling needs
- Barclays estimates data centers are a low-double-digit share of JCI sales; Trane and Carrier also fell
- Investors now watch CES updates, U.S. jobs data this week, and Johnson Controls’ next results expected Feb. 4
Johnson Controls International plc (NYSE: JCI) shares closed down 6.2% at $113.95 on Tuesday after Nvidia CEO Jensen Huang said the chipmaker’s next platform would sharply reduce the cooling equipment needed in data centers. The stock was down as much as 7.5% earlier in the session and hit a multi-month low. (Source: Reuters)
The selloff matters because investors have treated Johnson Controls and other heating, ventilation and air-conditioning (HVAC) suppliers as a way to play the AI-driven buildout of data centers. Cooling is a basic cost of running server farms, so any signal that the next wave of chips runs cooler can reset expectations for a fast-growing pocket of demand.
Barclays analysts estimate data centers represent a low-double-digit percentage of Johnson Controls’ total sales, meaning the share is above 10% but well below 20%. Huang’s remark that “no water chillers are necessary for data centres” struck at the center of that thesis; chillers are large machines that make cold water to carry heat away from equipment.
Huang made the comments at the Consumer Electronics Show in Las Vegas on Monday. He said Nvidia’s next generation of chips is in “full production,” and that the Vera Rubin platform — made up of six separate Nvidia chips — is expected to debut later this year.
In a note, Barclays analysts led by Julian Mitchell wrote that “given the primacy of Nvidia to the whole AI ecosystem, one should not take their comments lightly, although they seem rather dramatic at first glance.” The firm said Johnson Controls, Trane Technologies and Carrier Global were among the most exposed names, estimating data centers account for about 10% of Trane sales and 5% of Carrier’s.
Trane closed down 2.5%, while Carrier slipped 0.5%. Data-center infrastructure supplier Vertiv ended up 0.6%, after Barclays highlighted its position in “precision air cooling,” which tightly controls temperature and humidity in server halls.
Johnson Controls traded between $108.41 and $120.39 on Tuesday, setting the near-term reference points after the slide. The stock finished about $5 above the day’s low but still near a multi-month trough.
The drop in cooling names came even as Wall Street ended higher on renewed AI optimism, with the S&P 500 up 0.62% and the Dow at a record close. “We’re going to have a very strong earnings season for Big Tech,” said Jed Ellerbroek, a portfolio manager at Argent Capital. The S&P 500 trades at about 22 times expected earnings, according to LSEG data. (Source: Reuters)
The risk is that investors treat Nvidia’s claim as an immediate signal to cut forecasts for chiller demand, even though data centers still need to remove heat and may shift spending to different cooling designs rather than eliminate it. Johnson Controls last set fiscal 2026 guidance for adjusted EPS — profit per share excluding certain items — of about $4.55 and said its “technology leadership in advanced data center cooling” helps differentiate the business, leaving its next update sensitive to any change in data-center order trends. (Source: Johnson Controls earnings release (PDF))
Investors will look for follow-on detail from Nvidia and rivals as CES runs through Jan. 9, and for Wednesday’s Job Openings and Labor Turnover Survey and Friday’s U.S. jobs report for December to shape the interest-rate outlook. Johnson Controls’ next earnings report is expected on Feb. 4, according to market data compiled by Public.com. (Sources: CES 2026 dates, Public.com JCI earnings page)
