Tecogen sells industrial natural gas powered chillers. These are traditionally used in large buildings, think hospitals and universities, high rises, etc.
These chillers are now being designed into Ai data centers. Why? 1) Because they can run on natural gas. Every watt saved from the grid for cooling, is a watt that can now be used for compute. 2) They reduce the electrical infrastructure required for cooling and continue operating during grid outages because...they can be powered by natural gas. 3) They speed permitting. A current constraint on the system is how much power the local grid can provide. Data centers can now propose a reduced electrical demand due to cooling costs transferred to natural gas. The conference call transcript is very telling about how important reducing grid load is becoming, especially at peak times. Imagine tellin the utility you could reduce useage during peak times. Think that'd make a difference for your permit?
Tecogen has caught the attention of Vertiv (VRT). Vertiv designs and supplies Ai data center infrastructure, and is now featuring Tecogen's chillers, having installed units for their own use, and for demonstration to clients.
For a 120M market cap company 1) management seems to be very on top of the new business development, already planning for orders that exceed their ability. 2) Has a major storefront and marketer through Vertiv. 3) Already showcasing to clients with installed capacity in excess of 1GW. 4) Growing backlog. 5) Management says they can scale to 100 chillers per year. The company didn't disclose how many chillers it shipped in 2025, but based on revenue I estimate roughly 20–40 units of various sizes. (2025 revenue was 35-40M. Chillers were only a part of it. Estimate each chiller is about $400k-700k.) 6) Management is already disclosing possible scaling options beyond 100 units/year. 7) Executive pay is highly incentived towards share price appreciation through direct ownership. About 20% of CEO pay is cash. We don't have the full picture but I see the dots.
I'll wait for a full valuation until next quarter, or when we get an actual look at the margins on each chiller, and how many chillers are being placed for various data centers, how many data centers are in the pipeline, etc. The first disclosed deal is going to tell us a lot. For now though I think the possibility for TGEN to meaningfully do much more business than normal for the next several years is worth a few multiples more than their current market cap. If data center orders become a normal part of the business, I think 300M–800M is reasonable. If adoption becomes widespread, I think a $1B valuation becomes possible.
I eat paint chips. Do your own DD. I own the stock. I may sell or buy more at any time. Not financial advice.