Under-the-Radar AI Stock Vertiv Up 160% and Climbing

Key Points

• Vertiv Holdings has surged over 160% YTD, boosted by strong Q3 earnings and raised Q4 guidance amid rising demand for AI-driven infrastructure.
• The company designs and manufactures critical power, cooling, and IT solutions for data centers, making it a key player as AI and cloud applications fuel data infrastructure growth.
• A strategic partnership with NVIDIA and strong analyst support reinforce Vertiv’s growth potential as a prominent AI infrastructure provider.

Vertiv Holdings Co. NYSE: VRT has become a standout player in the industrial sector this year, with its stock up over 160% year-to-date and more than 200% over the past year. This under-the-radar industrial company recently surpassed Q3 expectations and raised its Q4 guidance, bolstering momentum in a market increasingly focused on AI-driven infrastructure. Given its remarkable growth trajectory and stellar rise this year, investors are likely questioning whether it’s time to pay closer attention to Vertiv or even consider buying in.

What Is Vertiv Holdings?

Vertiv Holdings, headquartered in Westerville, Ohio, designs and manufactures essential infrastructure technologies and provides life cycle services for data centers, communication networks, and industrial environments worldwide. Vertiv’s product offerings center around power, cooling, and IT infrastructure solutions for data centers, making it a strong contender as cloud computing and AI increasingly depend on robust data infrastructure. Analysts and general sentiment on Wall Street are bullish on Vertiv as a way to capture the growing investment in data centers to support AI and cloud applications.

With a market capitalization of $47 billion and an average daily volume of 6.65 million shares, Vertiv is gaining attention from participants, be it traders or institutional investors. On Friday, its stock hit a new all-time high, reinforcing its upward momentum as investors take note of the company’s promising outlook.

Impressive Performance Fueled by AI Power Demand

Vertiv’s impressive stock performance has been fueled by a surge in demand for data centers from tech giants investing billions to support AI applications. As companies look to scale AI-powered computing, Vertiv’s solutions are critical. The company provides essential equipment, especially cooling systems, necessary for the data centers that power AI.

The benefits of this trend are already showing in Vertiv’s financial results. In its Q3 2024 earnings report, released on October 23, Vertiv posted earnings per share (EPS) of $0.76, beating consensus estimates of $0.69 by $0.07. Quarterly revenue also grew 19% year-over-year to $2.07 billion, surpassing analyst expectations of $1.98 billion. In addition to these strong Q3 results, Vertiv raised its Q4 guidance, projecting organic net sales growth in the range of 11% to 15% for the coming months.

Vertiv’s Strategic Partnership With NVIDIA

Vertiv recently partnered with NVIDIA NASDAQ: NVDA, revealing a sophisticated reference design tailored for NVIDIA's latest Blackwell AI GPU last month. As AI technology drives demand for high-performance data centers, NVIDIA CEO Jensen Huang emphasized the need for advanced infrastructure to support this complexity. He noted that Vertiv’s cooling and power technologies are vital in helping NVIDIA achieve its vision of AI factories that will drive productivity and innovation across industries.

Vertiv’s use of liquid cooling technology sets it apart from traditional approaches, allowing for highly efficient management of data center energy use. With demand for NVIDIA’s Blackwell GPUs reportedly exceeding supply for the next year, Vertiv is well-positioned to benefit from ongoing investment in data center infrastructure. This strategic partnership strengthens Vertiv’s growth outlook and positions it as an indirect beneficiary of the AI boom as companies worldwide look to expand their data centers in alignment with AI developments.

Analysts Remain Steadfast With Strong Buy Ratings

Analysts remain highly bullish on Vertiv, maintaining a Strong Buy rating based on nine analyst recommendations, all of which are Buys. The company’s recent earnings and upward guidance revisions have only fueled positive sentiment among top analysts.

Following Vertiv’s earnings report on October 23, several prominent firms, including Bank of America, Citigroup, Oppenheimer, Evercore ISI, and TD Cowen, raised their price targets on the stock. These upgrades reflect growing optimism that Vertiv will continue to benefit from the AI-driven demand for data centers and its innovative approach to cooling solutions.