This Under-the-Radar Industrial Stock is Actually A Stealth Artificial Intelligence (AI) Play

Industry Overview - US electricity demand is projected to increase at a 2.4% annualized rate through 2030, largely driven by AI data centers [1] - There is a debate among investors about whether nuclear energy or natural gas will serve as the baseload fuel to meet the rising demand, with renewables also in the mix [2] Company Overview - Chart Industries (GTLS) manufactures equipment for cooling, heating, and purifying molecules, including cryogenic tanks, heat exchangers, industrial fans, and turbines [3] - The company expanded its portfolio significantly with the 2022 acquisition of Howden, enabling it to enter various energy-related markets, including LNG, hydrogen, and nuclear power [3][4] - Chart Industries also has exposure to clean mining applications, particularly in lithium and copper markets, which are critical for solar and electrification [4] Financial Performance - Chart Industries reported Q3 earnings that missed expectations due to timing issues with high-margin projects, but incoming orders grew and margins expanded [5] - The company provided early 2025 guidance, anticipating 12% revenue growth and 39% EPS growth compared to its 2024 outlook, driven by delayed order fulfillment [6] - Free cash flow surged to $175 million in Q3, with full-year 2024 guidance of$400 million and 2025 guidance of $550-$600 million, helping reduce its $3.9 billion debt [14] Market Opportunities - Chart Industries is benefiting from the growing demand for nuclear energy, with orders from major customers like EDF of France and small modular reactor (SMR) companies [7] - The company is also a key player in the LNG market, with robust orders for its IPSMR LNG technology from ExxonMobil, Woodside Energy, and Viability Gap in Tanzania [11] - Hydrogen is another growth area, with Chart securing significant orders in Egypt and Europe, supported by the US government's funding of seven hydrogen hubs [12] - The company is entering the data center market, winning orders for air-cooled heat exchangers to manage the heat generated by AI servers [13] Valuation and Investor Interest - Chart Industries trades at around 10 times its 2025 earnings guidance, making it an attractive value stock despite its significant debt from the Howden acquisition [14] - The company is hosting a capital markets day on November 12 to provide more insights for investors [15]