Ecolab

Data centers are enormous consumers of water and cooling, and Ecolab bought its way to the front of that line. In July 2026 it closed a 4.75 billion dollar deal for CoolIT Systems, a liquid cooling specialist for AI servers, on top of an earlier 1.8 billion dollar purchase of Ovivo's ultrapure water business that serves chip makers. High tech is now roughly 8 percent of revenue, up from low single digits, and management is targeting 4 billion dollars in high tech sales by 2030.

This is a razor and blade model at industrial scale, and the profits keep climbing. Ecolab has expanded its organic operating margin in every one of the last five quarters, and adjusted earnings per share has grown between 11 percent and 15 percent year over year in each of them. Second quarter 2026 sales hit 4.42 billion dollars, up 10 percent, with organic growth accelerating to 5 percent, the fastest pace in that stretch.

The stock trades near 33 times forward earnings, a steep price for a company whose full year 2025 revenue grew just 2 percent to 16.1 billion dollars. Strip out acquisitions and the core business is only growing 3 percent to 5 percent a year. Margin expansion has also been slowing, from 170 basis points a year ago to 40 basis points last quarter, and that expansion has been the main engine behind earnings growth.

Ecolab is buying its growth on credit. Total debt jumped from 8.1 billion dollars at the end of 2025 to 13.2 billion dollars by June 2026 to pay for CoolIT. The cost showed up immediately: once that deal was folded in, the company's own 2026 earnings guidance fell from a range of 8.43 to 8.63 dollars per share down to 8.05 to 8.25 dollars, because of financing costs and non cash amortization.