{"id":12497,"date":"2026-08-11T11:25:58","date_gmt":"2026-08-11T15:25:58","guid":{"rendered":"https:\/\/distributionstrategy.com\/?p=12497"},"modified":"2026-09-11T10:43:23","modified_gmt":"2026-09-11T14:43:23","slug":"ferguson-says-ai-data-center-boom-is-driving-distributor-growth","status":"publish","type":"post","link":"https:\/\/distributionstrategy.com\/2026\/08\/ferguson-says-ai-data-center-boom-is-driving-distributor-growth\/","title":{"rendered":"Ferguson Says AI Data Center Boom Is Driving Distributor Growth"},"content":{"rendered":"\n

Why This Matters to Distributors:<\/strong> Artificial intelligence investment is creating a major infrastructure market for distributors as data center construction increases demand for cooling, water, HVAC, piping, valves, pumps, and other products.<\/em><\/p>\n\n\n\n

Ferguson Enterprises is seeing the artificial intelligence infrastructure boom translate into higher distribution demand, with data center construction now the strongest part of its large capital project business.<\/p>\n\n\n\n

President and CEO Kevin Murphy said data centers are leading a broader increase in project activity that includes power generation and water infrastructure.<\/p>\n\n\n\n

\u201cAs you look at the overall bidding activity and activity levels, they continue to be strong, not just in the data center activity, which is obviously the strongest, but across power generation and water infrastructure,\u201d Murphy told analysts during Ferguson\u2019s second-quarter earnings call.<\/p>\n\n\n\n

The AI infrastructure build-out extends well beyond servers and semiconductors. Data centers require cooling equipment, piping, valves, pumps, HVAC systems, fire suppression products, and water infrastructure \u2014 categories that run through Ferguson\u2019s distribution network.<\/p>\n\n\n\n

The demand is already showing up in Ferguson\u2019s results.<\/p>\n\n\n\n

Commercial mechanical sales increased 15% in the second quarter, following 20% growth a year earlier. Ferguson said large capital projects, including data centers, pharmaceutical production, biotechnology and general manufacturing, helped drive the increase. Industrial sales rose 18% after increasing 6% a year earlier.<\/p>\n\n\n\n

Ferguson reported second-quarter sales of $8.8 billion, up 4.6% from a year earlier. U.S. sales increased 5%, while the company\u2019s nonresidential business grew 8%.<\/p>\n\n\n\n

The Backlog<\/h2>\n\n\n\n

Ferguson\u2019s open orders and backlog for those projects also continue to grow.<\/p>\n\n\n\n

\u201cThe backlogs, the open orders continue to build,\u201d Brundage said, pointing to commercial mechanical, industrial, and waterworks. He said Ferguson expects large capital projects to remain a growth driver over the next several years.<\/p>\n\n\n\n

Murphy said data centers continue to lead the market, although large-project demand is broadening.<\/p>\n\n\n\n

\u201cWe do see good, broad-based, large capital construction project growth,\u201d Murphy said. \u201cData center construction activity continues to be the strength of that sector.\u201d<\/p>\n\n\n\n

Ferguson is also seeing growth in power generation, chemicals, food and beverage, general manufacturing, mining and minerals, and water and wastewater treatment.<\/p>\n\n\n\n

The expansion is particularly relevant to AI infrastructure because data centers require significant power, cooling, and water capacity, creating demand beyond the facilities themselves.<\/p>\n\n\n\n

Murphy said Ferguson is becoming involved earlier in major projects to help customers manage product availability and supply chain requirements. Labor availability and supply chain pressures make that early involvement increasingly important as contractors work to meet construction schedules, he said.<\/p>\n\n\n\n

Ferguson Expands Around Data Center Demand<\/strong><\/p>\n\n\n\n

Ferguson is increasing inventory and using acquisitions to expand its capabilities in markets benefiting from data center and other infrastructure investment.<\/p>\n\n\n\n

Murphy said inventory supporting large capital projects will continue to increase as Ferguson\u2019s backlog grows. The company invested $234 million in capital projects during the first half of 2026, primarily in supply chain expansion and optimization, its branch network and technology initiatives.
Ferguson has announced eight acquisitions this year representing approximately $1.4 billion in combined annual sales. The deals expand their capabilities in water and wastewater treatment, HVAC, industrial valves, and flow control.<\/p>\n\n\n\n

Several also increase Ferguson\u2019s exposure to data center infrastructure.<\/p>\n\n\n\n

New England Applied Products, a commercial HVAC systems manufacturer\u2019s representative acquired by Ferguson, serves traditional construction and large capital projects, including data centers, education, and health care facilities.<\/p>\n\n\n\n

Ferguson also acquired PRD Technologies Group, which adds highly technical valves, flow-control, and process equipment through 10 U.S. locations.<\/p>\n\n\n\n

The company\u2019s largest recent move is its planned $1.6 billion acquisition of Houston-based FloWorks, an industrial distributor specializing in valves and flow-control products.<\/p>\n\n\n\n

FloWorks generated approximately $1 billion in sales in 2025 and operates more than 60 locations, including 25 service and repair centers across the U.S. and Canada. Its capabilities include valves, automation, pumps, fluid-handling systems and specialty pipe, fittings, and flanges.<\/p>\n\n\n\n

Ferguson said FloWorks will increase its exposure to data centers, semiconductor manufacturing, power generation, biotechnology, pharmaceuticals, and other large industrial markets. The acquisition is also expected to increase Ferguson\u2019s addressable market to approximately $400 billion from $340 billion.<\/p>\n\n\n\n

Murphy said FloWorks brings additional capabilities and customer relationships in power generation and semiconductor manufacturing that complement Ferguson\u2019s existing large-project business.<\/p>\n\n\n\n

The acquisition strengthens Ferguson\u2019s position in \u201cthe build-out of North American infrastructure around data centers, chip production, power generation, water, and also pharma and biotechnology,\u201d Murphy said.<\/p>\n\n\n\n

The FloWorks acquisition is expected to close in Ferguson\u2019s third quarter.<\/p>\n\n\n\n

For Ferguson, the immediate AI opportunity is not primarily the technology itself. It is the physical infrastructure required to support AI computing.<\/p>\n\n\n\n

Data center construction is already contributing to sales growth, expanding Ferguson\u2019s backlog, and influencing its inventory and acquisition strategy. With bidding activity remaining strong, Ferguson expects large capital projects to continue driving growth over the next several years.<\/p>\n\n\n\n

Do not miss any content from Distribution Strategy Group. Join our list.<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

For Ferguson, the immediate AI opportunity is not primarily the technology itself. It is the physical infrastructure required to support AI computing.<\/p>\n","protected":false},"author":8,"featured_media":12444,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_tec_requires_first_save":true,"content-type":"","_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"_tribe_blocks_recurrence_rules":"","_tribe_blocks_recurrence_description":"","_tribe_blocks_recurrence_exclusions":"","_featured_video_url":"","footnotes":""},"categories":[295,293,4],"tags":[],"coauthors":[208],"class_list":["post-12497","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai-automation","category-ai-tech-digital-commerce","category-distribution-industry-news"],"yoast_head":"\nFerguson Says AI Data Center Boom Is Driving Distributor Growth - Distribution Strategy Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/distributionstrategy.com\/2026\/08\/ferguson-says-ai-data-center-boom-is-driving-distributor-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ferguson Says AI Data Center Boom Is Driving Distributor Growth - Distribution Strategy Group\" \/>\n<meta property=\"og:description\" content=\"For Ferguson, the immediate AI opportunity is not primarily the technology itself. 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