Carrier Global Sees $3 Billion in Data Center Sales as Cooling Orders Surge 350%

Key Points

• Data center demand is surging: Carrier expects roughly $2 billion in data center sales in 2026 and about $3 billion in 2027, with orders up 350% year to date and a record $8.5 billion commercial HVAC backlog.
• Costs remain a headwind: Carrier anticipates about $800 million in additional input costs in 2026 and more than $500 million in 2027, and is using price increases and productivity gains to offset the pressure. It has also incurred extra costs to ramp data center production.
• Other markets are improving: North American residential demand has proved more resilient than expected, while Carrier is targeting another year of double-digit aftermarket growth and sees European conditions improving.

Carrier Global NYSE: CARR expects data center sales to reach about $2 billion in 2026 and approximately $3 billion in 2027, as growing demand for cooling equipment helps support the company’s broader sales outlook, executives said at Baird’s Global Industrial Conference.

Chairman and CEO Dave Gitlin said data center sales would roughly double in 2026 from the prior year, with orders up 350% year to date. He said the business would represent just under 10% of Carrier’s total sales this year and more than 10% next year.

Gitlin said Carrier remains confident in its medium-term target for 6% to 8% organic growth. He expects growth of around 10% in 2026 and in the mid- to high-single-digit range in 2027. The company’s commercial HVAC backlog stands at a record $8.5 billion, he said.

Data center growth and costs

Chief Financial and Strategy Officer Patrick Goris said Carrier has more than $2 billion in data center backlog for 2027 and expects approximately $3 billion in sales from the market next year, potentially a little more. An additional $1 billion in data center sales would contribute about four percentage points of organic growth for the company, he said.

Gitlin said reaching the 2026 data center sales target implies about $1 billion in fourth-quarter sales. Carrier has incurred extra costs to expedite components as it ramps production, but he said designs for its new 2-megawatt and 3-megawatt air-cooled chillers are now stable and have passed initial testing.

The company is working to improve factory production and add suppliers, while a new Texas factory will have space to produce some key subassemblies, Gitlin said. He expects expediting costs and other startup inefficiencies to subside as the company moves through 2027.

Asked about potential election-related implications for data center demand, Gitlin said the next few years of customer activity are largely supported by firm orders, long-term agreements with mandatory minimums and projects already under construction.

Pricing and residential demand

Goris said Carrier faces approximately $800 million in incremental input costs in 2026 and expects a further headwind of slightly more than $500 million in 2027. The company has announced additional price increases and is pursuing productivity improvements to offset the pressure, he said.

Gitlin said Carrier announced an 8% price increase for its residential business, effective Dec. 15. He attributed this year’s pricing pressure in part to the suddenness of tariff and raw-material cost increases.

North American residential demand has been more resilient than Carrier initially expected, Gitlin said. The company now expects the total market to be between 7.5 million and 8 million units in 2026, compared with its earlier expectation of about 6.5 million. Carrier’s residential business is expected to grow around 10% this year, rather than decline by a high-single-digit percentage as initially anticipated.

About 75% to 80% of Carrier’s residential business comes from replacement demand, Gitlin said. He added that conversations with distributors have reinforced his view that the market’s fundamentals have not changed.

Aftermarket and Europe

Carrier is targeting another year of double-digit aftermarket growth, which Goris said could add one to two percentage points to companywide organic growth in 2027. Gitlin said the company has grown aftermarket sales at a double-digit rate every year since its spin and is on track to do so again in 2026.

Goris said the business environment in Europe is better than it has been at any point in the past two to three years. Commercial HVAC orders have improved, helped by data centers, while Germany’s heating market is recovering from multidecade lows, he said. Goris added that he would be surprised if Carrier did not report European revenue growth in 2027.

Gitlin said Carrier’s European heat pump and air conditioning sales each rose nearly 35% in the latest quarter. He expects further cost actions to support margin expansion in the region.

About Carrier Global (NYSE:CARR)

Carrier Global Corporation develops and provides heating, ventilation, air conditioning and refrigeration systems, along with related building technologies. Its products and services serve residential, commercial and industrial customers, as well as applications that require temperature-controlled transportation and storage. The company's offerings include heating and cooling equipment, building automation and energy-management solutions, and fire and security systems. Its portfolio includes brands such as Carrier, Bryant and Kidde, and it provides installation, maintenance and other services to support its equipment.

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