Water is one of the world’s most essential resources. Unfortunately, a combination of shifting populations, data center demand and strategic military attacks on water and infrastructure could create water shortages that lead to big problems in the coming years and decades.
The latest threats to global water supplies have come since the U.S. and Israel launched military attacks in Iran. Iran has reportedly responded by launching a drone attack on at least one water desalination plant in Bahrain. Because of the arid climate in the Middle East, the region relies on roughly 5,000 of these desalination plants, which convert salt water into potable drinking water. Desalination plants provide about 80% of drinkable water to Israel and about 90% of water demand for Kuwait.
In the U.S., data centers in Texas alone consumed an estimated 49 billion gallons of water in 2025, and that number is expected to grow to 399 billion gallons in 2030 as artificial intelligence technology demand ramps. A single large data center requires up to 5 million gallons of water per day for cooling, roughly the same water demand as a city of 50,000 people.
For investors, the silver lining to water shortages is that a growing number of companies are working to use technology and innovation to combat a potential water crisis. If water shortages become more of an issue, some of these companies could make excellent long-term investments. Here are seven water-related stocks investors should buy, according to Bank of America:
Stock
H2O America （ticker: HTO）
California Water Service Group （CWT）
Ferguson Enterprises Inc. （FERG）
Crane Co. （CR）
AECOM （ACM）
Primo Brands Corp. （PRMB）
Ecolab Inc. （ECL）
H2O America （HTO）
H2O America is a water utility holding company that is the parent of water and wastewater utility companies in California, Connecticut, Maine and Texas. It is also one of Bank of America’s top investment picks among water infrastructure and supply stocks. Analyst Ross Fowler says H2O America’s stock has the most attractive valuation in the entire water utility group based on estimated 2027 earnings. Fowler believes the company can unlock some of this value as it further improves investor communications and earnings mix quality. Bank of America has a “buy” rating and $59 price target for HTO stock, which closed at $58.68 on March 16.
California Water Service Group （CWT）
California Water Service is one of the largest publicly traded regulated water utility companies in the U.S. It specializes in treating, testing, storing and distributing water to more than 2 million Americans in California, New Mexico, Hawaii, Nevada and Oregon. In addition to its core operations, California Water provides fire protection and wastewater collection services. Fowler says California Water Service’s earnings visibility is improving, and the company’s capital expenditures could be much higher than expected depending on whether or not California approves rate hikes. Bank of America has a “buy” rating and $51 price target for CWT stock, which closed at $45.03 on March 16.
Ferguson Enterprises Inc. （FERG）
Ferguson Enterprises provides plumbing supplies, HVAC products and other building supplies to homeowners and professional contractors. Its Ferguson Waterworks division specifically focuses on water, sanitary sewer and stormwater management. Analyst Arnaud Lehmann anticipates an acceleration in Ferguson’s organic sales growth fueled by reflation and volume improvements. He says the stock trades at a sizable valuation discount to peers despite multiple bullish catalysts, including capital allocation flexibility and positive earnings momentum. Lehmann says data center projects and an aging U.S. housing stock will also provide tailwinds. Bank of America has a “buy” rating and $285 price target for FERG stock, which closed at $223.55 on March 16.
Crane Co. （CR）
Crane is a specialized industrial technology company that produces engineered products used for fluid handling. Its aerospace and electronics segment supplies systems and critical components to the commercial aerospace and military defense markets. However, its process flow technologies segment includes pumps and related products used for water and wastewater applications in the U.S. industrial, municipal, commercial and military markets. Analyst Ronald Epstein says Crane is a well-run company with disciplined operations and significant synergy opportunities as it completes integration of its recent acquisitions. Bank of America has a “buy” rating and $225 price target for CR stock, which closed at $173.87 on March 16.
AECOM （ACM）
AECOM provides professional infrastructure consulting services for businesses, governments and organizations around the world. Unlike water distributors, AECOM serves as a technical advisory partner and engineering services provider for large-scale industrial and municipal projects. Analyst Michael Feniger says AECOM will benefit from an improving margin profile, infrastructure investment spending and a strong project backlog. In addition, Feniger says AECOM management has leveraged AI technology to expand its addressable market and scale its operations. AI integrations could also help unlock value for customers and investors over time. Bank of America has a “buy” rating and $118 price target for ACM stock, which closed at $88.65 on March 16.
Primo Brands Corp. （PRMB）
Primo Brands is a U.S. leader in bottled water via leading brands like Poland Spring, Pure Life, Saratoga and the Mountain Valley. Any water crisis, including major drought, contamination or supply disruption, would make reliance on bottled water at least a temporary necessity. Analyst Peter Galbo says Primo is resolving transitional issues and on track to achieve its revenue targets. If Primo’s management can execute and improve operations, Galbo says the company can regain investor confidence and the stock will reflect those positive changes. Bank of America has a “buy” rating and $25 price target for PRMB stock, which closed at $20.15 on March 16.
Ecolab Inc. （ECL）
Ecolab provides water, hygiene, and energy technologies and services to a wide range of customers, including the food service and processing, health care, hospitality, industrial and energy markets. /Ecolab is one of Bank of America’s top water treatment stock picks, and the company primarily operates its water treatment business through its Nalco Water subsidiary. Analyst Matthew DeYoe says Ecolab has a strong market position and durable competitive advantages. He is particularly bullish on the company’s water business, which should benefit from increasing regulation and water scarcity. Bank of America has a “buy” rating and $337 price target for ECL stock, which closed at $273.11 on March 16.
