Capital Rotation Alert: AI Infrastructure Supply Chain

GB2 Partners | Market Intelligence Briefing

Infrastructure & Industrial Deal Flow Monitor

February 2026

Executive Summary

Institutional capital is quietly rotating toward industrial infrastructure companies exposed to the AI data center buildout. This shift is occurring outside the traditional technology allocation playbook and is increasingly visible in backlog expansion, contracted revenue visibility, and secondary market liquidity.

Q4 2025 earnings have materially strengthened this thesis. Multiple infrastructure suppliers reported order acceleration well beyond expectations, indicating that demand for power, cooling, and electrical infrastructure is not plateauing but intensifying. These developments are creating pricing dislocations and liquidity dynamics in segments historically overlooked by growth-oriented investors.

Market Context: The Infrastructure Bottleneck

Over the past two quarters, the AI investment narrative has shifted meaningfully.

What has changed:

Power availability, cooling capacity, and electrical infrastructure — rather than semiconductor supply — have emerged as the primary constraints on data center expansion.

As AI compute density increases, infrastructure timelines are being stretched by:

• Multi-year grid interconnection queues

• Cooling systems not designed for next-generation rack densities

• Limited availability of qualified electrical and mechanical contractors

These constraints operate on multi-year permitting and construction cycles and cannot be resolved quickly.

The Modern “Picks-and-Shovels” Dynamic

The AI buildout increasingly resembles prior industrial expansion cycles, where consistent returns accrued to infrastructure enablers rather than end-platform winners.

While semiconductor manufacturers and model developers face platform risk and technology cycles, infrastructure suppliers benefit from aggregate demand regardless of which AI architectures ultimately prevail. A data center requires power, cooling, and electrical systems independent of chip vendor or software stack.

This dynamic offers:

• Platform-agnostic exposure to AI capital expenditure

• Contracted backlog visibility rather than cyclical product demand

• Physical and regulatory barriers to entry

• Pricing power in capacity-constrained segments

Where Capital Is Concentrating

Backlog Visibility as a Capital Magnet

Unlike technology demand tied to product cycles, infrastructure backlogs represent signed contracts with multi-year revenue visibility. This characteristic is increasingly attractive to institutional allocators seeking duration and predictability.

Across key infrastructure segments, backlog growth has accelerated materially:

• Electrical infrastructure contractors reporting multi-year backlog coverage

• HVAC and mechanical specialists seeing order growth outpace capacity expansion

• Data center-focused infrastructure providers reporting elevated book-to-bill ratios

These backlogs reflect committed spend rather than projections, providing unusual forward visibility for industrial names.

Segment Observations

1. Thermal Management & Liquid Cooling

AI rack density has exceeded the limits of traditional air-cooling systems. Liquid cooling adoption is moving from early deployment toward broader implementation.

Recent earnings confirm thermal management as one of the most capacity-constrained components of data center infrastructure.

Key observations include:

• Accelerating order intake for liquid cooling systems

• Multi-year supply agreements between hyperscalers and cooling providers

• New manufacturing capacity being added to meet demand

The combination of demand intensity and limited near-term supply expansion has contributed to elevated book-to-bill ratios and pricing power across the segment.

2. Electrical Infrastructure & Grid Services

Grid connectivity has become a binding constraint on data center deployment. Developers increasingly select sites based on power availability rather than land cost or proximity.

Electrical contractors with established utility relationships and transmission expertise are experiencing demand that exceeds available capacity, with backlog visibility extending several years in some cases.

Institutional interest has broadened beyond the largest, well-covered contractors toward lesser-followed public companies servicing the same end markets.

3. Site Development & Construction

Data center construction requires specialized site preparation and infrastructure capabilities. This segment provides exposure to AI infrastructure expansion without dependence on technology platform outcomes.

Recent results indicate:

• Rapid revenue growth in data center-related construction activity

• Margin expansion driven by pricing power and project selectivity

• Increasing backlog concentration in infrastructure-focused segments

This platform-agnostic exposure has drawn interest from allocators seeking industrial participation without technology execution risk.

Power Generation & Long-Duration Contracts

A notable development over the past year has been the emergence of long-term power purchase agreements between hyperscalers and independent power producers.

These agreements, often extending 10–20 years, reflect a structural shift in how large technology companies secure baseload power and have implications for:

• Power generator valuation frameworks

• Capital formation in energy infrastructure

• Long-duration revenue visibility across the power supply chain

Valuation & Liquidity Context

Valuation dispersion across infrastructure segments has widened meaningfully. Companies with comparable backlog visibility and end-market exposure are trading across a broad range of multiples.

This dispersion, combined with improving liquidity in previously overlooked names, has coincided with increased block activity and secondary market inquiry in select segments.

Current observations include:

• Increasing block activity in mid-cap industrials with data center exposure

• Improved liquidity in names historically considered sub-scale for institutional participation

• Growing divergence between backlog fundamentals and market pricing

These dynamics are monitored in the context of potential block transactions, secondary placements, and advisory engagements.

Outlook

Infrastructure constraints on AI deployment appear structural rather than cyclical. Power, cooling, and electrical limitations operate on multi-year timelines and are unlikely to normalize quickly.

Recent earnings data suggests demand continues to accelerate, particularly in capacity-constrained segments. Upcoming reporting periods across electrical and mechanical contractors will provide further clarity on whether this acceleration is broad-based or concentrated in thermal management.

GB2 Partners will continue to monitor these developments as market positioning and deal flow evolve.

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