Recently, investors have been searching for the optimal strategy to gain exposure to the artificial intelligence buildout.
This has evolved from direct exposure through AI companies to the infrastructure that supports AI rather than in AI software itself.
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The AI revolution and the ASX
Because Australia has relatively few direct AI leaders comparable to Nvidia Corp (NASDAQ: NVDA) or Microsoft Corp (NASDAQ: MSFT), investors have focused on:
- Data-centre operators
- Electricity generators and infrastructure companies
- Mining companies with exposure to commodities needed to build and power data centres, particularly copper and uranium.
ASX investors have also turned to thematic ASX ETFs that target these companies.
Overall, the ASX AI investment strategy has increasingly become a "picks and shovels" approach: rather than trying to identify Australia's next major AI software company, investors are targeting the physical infrastructure and resources needed to power and expand the global AI boom.
Adrad Holdings Ltd (ASX: AHL) has been identified as a potential beneficiary of the AI boom.
Company overview
Adrad is an Australian-based business specialising in the design, manufacture, importation and distribution of heat transfer solutions for the automotive and industrial markets in Australia, New Zealand and Southeast Asia.
Its stock price has risen over 50% year to date.
Its strong rise in 2026 is closely connected to AI/data-centre infrastructure, but there is more to the story. AHL has exposure to the growing need for cooling systems for data centres, as well as mining, power generation and other heavy-industry applications.
Big upside for this ASX stock
A fresh report from the team at Bell Potter suggests this ASX stock could be a long-term beneficiary of the AI boom.
Bell Potter is increasingly positive on Adrad because of its exposure to the rapidly growing data-centre and AI infrastructure market.
The company has responded to growing demand by doubling its Australian data-centre capacity and expanding manufacturing in Thailand, with the additional capacity already generating new customer orders.
Bell Potter therefore expects this data-centre investment to support Adrad's revenue and earnings growth over the medium term.
While its FY27 forecasts remain unchanged, Bell Potter has upgraded its FY28 and FY29 expectations, increasing revenue forecasts by 3% and 5% and EPS forecasts by 9% and 13%, respectively.
It now expects mid-to-high single-digit revenue growth and mid-to-high teens EPS growth in FY28 and FY29, respectively.
The broker has a buy recommendation on this ASX stock as well as an upgraded price target of $1.80 (previously $1.40).
From yesterday's closing price, this indicates approximately 14% upside.
