Air con and building efficiency stocks rally as Europe bakes in extreme heat

A worker attends to an air conditioning unit for a restaurant during high temperatures in Toulouse, France, on Wednesday, June 24, 2026. France is at the epicenter of this month’s heat wave, as a high-pressure heat dome is reinforced by atmospheric shifts linked to a developing El Niño.

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Air conditioning and building efficiency stocks extended gains on Thursday as several European countries issued red weather alerts during a fresh bout of extreme heat.

The heat wave marks the second so-called heat dome Europe is experiencing in just two months, with the U.K. notching its all-time temperature record for June on Wednesday and France registering its hottest day ever for the second consecutive day.

The searing heat, alongside unprecedented consumer and commercial demand for air conditioning, appears to have prompted investors to flock to a basket of climate-related stocks.

French construction materials company Saint Gobain, which designs and supplies components used within heating, ventilation and air conditioning (HVAC) systems, rose 2.2% on Thursday, extending gains of more than 3% in the previous session.

Beijer Ref, a world-leading wholesaler of cooling and HVAC equipment, advanced 1.3%, having climbed nearly 5% on Wednesday. The Stockholm-listed company is a supplier of refrigeration and air conditioning equipment to the trade.

Sweden’s NIBE Industrier was another cooling-related stock moving higher on Thursday morning. The company, which produces air and ground source heat pumps, as well as other climate control equipment, was last seen trading 0.7% higher, extending gains of 3.7% in the previous session.

Milan-listed Ariston, which manufactures energy efficient heating and cooling systems, rose 2.3% on Thursday, on track for its third consecutive positive session.

Elsewhere, Danish building materials company Rockwool was last seen up 0.9%, having closed 3.1% higher on Wednesday. The Copenhagen-listed company manufactures insulation products designed to significantly improve building climate resilience by regulating indoor temperatures.

The latest heat wave has underscored the need for efficient technologies and adequate power supply to keep Europe cool. The acceleration of AI adoption, alongside regional decarbonization policies, cultural shifts and income changes, has also supercharged this megatrend.

‘Growing need for renovations’

Matthew Donen, director of equity research at Morningstar, said more than 85% of the European Union’s buildings were constructed before 2001 and many were not designed for today’s climate challenges.

“The current heat wave highlights the growing need for renovations that improve energy efficiency by reducing cooling demand,” Donen said.

He singled out Saint-Gobain as a company that appears to be “well positioned” to benefit from increased investment in upgrading the region’s building stock.

However, Donen said that while the heat wave reinforces the long-term investment case, it is unlikely to have a material impact on near-term earnings expectations or share price performance.

Scientists warn climate change is exacerbating the frequency and intensity of extreme weather events. The burning of fossil fuels such as coal, oil and gas is the chief driver of the climate crisis.

Europe is known to be warming faster than any other continent, at twice the speed of the global average since the 1980s, according to the European Union’s Copernicus Climate Change Service.