Japan's Nomura Bank said a technology has become critical to support the artificial intelligence server needs of Nvidia and other technology giants. That's liquid cooling, a cooling technology used in data centers that helps improve power and cost efficiency. Nomura said the type of cooling used so far has been air cooling, but companies are starting to look at other options. “As air cooling approaches the limits of its cooling capabilities, the importance of liquid cooling becomes increasingly apparent… Liquid cooling is becoming a must-have for the GB200,” the bank said. The GB200 is Nvidia's next-generation AI graphics processor and will ship later this year. Nomura Securities estimates that the liquid cooling penetration rate of Nvidia AI servers will rise from 8% in 2024 to 43% in 2025, and to 47% by 2026. and service development. It also means that AI data centers are growing rapidly—and so is the demand for them. Data centers have the massive computing power required for artificial intelligence workloads. Morgan Stanley said in a previous report that liquid cooling systems are a solution to “power shortage stress” in data centers. The company says such systems can save 10% to 15% on capital expenditures. Against this backdrop, Jefferies is bullish on four Asian stocks it says will be “major beneficiaries” of the liquid cooling trend. AVC: Jefferies said AVC should have at least 50% market share in Nvidia G200 cold plate orders from top cloud service providers. A cold plate is a component that transfers heat from a device and dissipates it in another cooling system. The stock's price target is NT$743 (US$23.20), implying an upside of about 30%. Auras: Auras supplies cold plates to Advanced Micro Computers, another popular beneficiary of the artificial intelligence boom. Jeffries pointed out that the Taiwanese company is also the “promoter” of the CDU (coolant distribution unit) of electronics company Quanta Technology giant Meta. The stock's target price is NT$797, implying an upside of approximately 25%. Delta Air Lines: Taiwanese company Delta Air Lines could win market share in liquid cooling content for tech giants like Microsoft, Meta and Amazon Web Services, Jeffries said. The stock's price target is NT$490, implying an upside of about 25%. Nidec: Nidec is a major supplier of coolant distribution devices for AMD, and Jefferies said it is “aggressively” promoting the business. The stock's price target is 9,000 yen ($62.6), implying an upside of about 53%. —CNBC’s Michael Bloom contributed to this report.