Four Water Stocks to Watch as AI Data Centers Drive a New Infrastructure Boom

Of the four water-related stocks we reviewed, I’m currently more interested in Pentair ($PNR) because of its potential turnaround setup in 2027.

The ugly part is obvious: Q2 revenue fell 17%, Pool was hit by roughly $170M of channel destocking, and management cut FY2026 EPS guidance to $4.60–$4.80.

But the key question is whether this is a real demand problem or mostly an inventory reset.

Outside Pool, the business looks healthier. Flow sales grew about 5% while segment income rose 27%, and Water Solutions improved profitability despite lower sales.

Then there’s Taco Group. Pentair is acquiring the HVAC and water systems company for about $1.4B, adding more exposure to data-center cooling infrastructure. Taco generates more than $500M in annual revenue and Pentair expects the deal to be accretive to 2027 EPS.

So the potential 2027 setup is pretty straightforward:

**Pool destocking ends + easier YoY comps + Taco contribution + more data-center exposure.**

The risks are still meaningful. Pool demand could stay weak, the Taco deal adds debt, and execution on the integration still matters.

But with PNR trading at a discount to both peers and its own historical valuation, I think the turnaround angle is worth watching.

What do you think? Is PNR mainly dealing with a temporary inventory problem, or do you see something more structural in the Pool business?

And between PNR, XYL, ECL and AWK, which water-related name looks the most interesting to you for 2027?