AI Infrastructure Companies Undergo Market Revaluation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 23 2026
0mins
Should l Buy VRT?
Source: stocktwits
- Market Revaluation: The S&P 500 index's inclusion of Vertiv, Lumentum, Coherent, and EchoStar signals a shift in investor focus towards AI infrastructure companies, indicating a growing recognition of the physical systems that support AI technologies.
- Investment Dynamics: Nvidia's $2 billion investments in Lumentum and Coherent in early March aim to advance optical technologies essential for future AI systems, highlighting a strong demand for optical infrastructure to meet escalating data transfer needs.
- Performance Outlook: Vertiv forecasts 2026 revenue between $13.25 billion and $13.75 billion, reflecting an organic growth rate of approximately 27% to 29%, compared to analysts' estimates of $12.39 billion, showcasing the company's robust growth potential amid the AI boom.
- Stock Market Performance: Although Vertiv's stock traded 3% lower in premarket on Monday, it has gained 57% year-to-date, demonstrating market recognition of its critical role in heat management and power solutions for AI data centers.
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Analyst Views on VRT
Wall Street analysts forecast VRT stock price to fall
17 Analyst Rating
15 Buy
2 Hold
0 Sell
Strong Buy
Current: 251.070
Low
195.00
Averages
206.07
High
230.00
Current: 251.070
Low
195.00
Averages
206.07
High
230.00
About VRT
Vertiv Holdings Co. provides mission-critical digital infrastructure technologies and lifecycle services primarily for data centers, communication networks, and commercial and industrial environments. The Company operates in three business segments: the Americas; Asia Pacific, and Europe, Middle East & Africa. The Company's offerings include alternate current (AC) and direct current (DC) power management, thermal management, low/medium voltage switchgear, busbar, air cooled and liquid cooled thermal management products, integrated modular solutions, racks, single phase UPS, rack power distribution, rack thermal systems, configurable integrated solutions, energy storage solutions, hardware, software for managing IT equipment, management systems for monitoring and controlling digital infrastructure, and services. It also provides preventative maintenance, acceptance testing, engineering and consulting, remote monitoring, training, spare parts, specialized fluid management, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Repricing: Investors are questioning the profitability of AI companies, particularly those that are burning cash, leading to a repricing of AI-related stocks and reflecting concerns about future profitability.
- Portfolio Shift: Morgan Stanley highlights a market shift from AI infrastructure providers to AI adopters, emphasizing companies that can leverage AI to enhance productivity and margins, showcasing a focus on real-world applications.
- Semiconductor Resilience: While the software sector faced sell-offs, the semiconductor industry remained robust, with the Russell 1000 Semiconductor Index diverging sharply from the software sector, indicating strong demand for physical AI infrastructure.
- Growing Infrastructure Demand: Companies like Vertiv and Amphenol benefit from AI's cooling and connectivity needs, underscoring the increasing importance of infrastructure roles within the AI ecosystem, suggesting future investments will prioritize these durable demands.
See More
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- Market Transformation: Investors are shifting focus from AI 'builders' to 'adopters,' reflecting a growing demand for actual revenue and margins, resulting in significant declines for some AI stocks as profitability becomes a central concern.
- Software Sector Adjustment: The software industry has faced a sell-off as the market reprices companies, questioning the viability of those that remain unprofitable amidst rapid AI advancements, impacting both good and bad companies alike.
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- Portfolio Restructuring: Future AI investment portfolios will focus more on infrastructure rather than concentrated tech bets, with companies like Vertiv and Equinix benefiting from their critical roles in data centers and internet infrastructure, highlighting the market's emphasis on durable demand.
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- Lumentum's Strong Performance: Lumentum's stock has surged approximately 116% this year, with a current market cap of $49 billion, primarily driven by Nvidia's $2 billion investment aimed at advancing optical networking products, highlighting its critical role in scaling AI factories.
- EchoStar's Growth Potential: EchoStar's stock has skyrocketed 360% over the past 52 weeks, although it has only risen 13% this year; its position in the communication services sector allows it to benefit from the S&P 500's influence, attracting more investor attention.
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- Price Range Analysis: The IWR ETF has a 52-week low of $73.168 and a high of $103.529, with the last trade at $96.17, indicating relative stability and investor confidence in the current market.
- Technical Analysis Tool: Comparing the latest share price to the 200-day moving average provides valuable insights for investors, helping to assess market trends and potential buying opportunities.
- ETF Unit Trading Mechanism: ETFs trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on investor demand, impacting liquidity and market performance.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding helps identify significant inflows (new units created) or outflows (old units destroyed), which can influence the performance of individual stocks held within the ETF.
See More
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- Market Reaction: Futures fell as Iran's interception of ships in the Strait of Hormuz highlighted geopolitical tensions, negatively impacting investor sentiment and potentially leading to oil price volatility.
- Trump's Policy Extension: Despite Trump's extension of a deadline, the market's muted response indicates that geopolitical risks overshadow policy stability, reflecting investor concerns about future uncertainties.
- Tech Stocks Decline: The downturn in shares of tech giants like Meta, Microsoft, and Google suggests a waning investor confidence in the tech sector, which could adversely affect overall market performance and trigger broader sell-offs.
- Investor Sentiment Fluctuation: Heightened geopolitical risks have made investors more cautious, likely resulting in capital outflows from risk assets and exacerbating market uncertainty.
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- Buying Opportunity: Despite a 30% drop in Credo's stock price to around $100 in 2026, the strong demand for its high-bandwidth connectivity components makes it an appealing buy-the-dip target.
- Sales Growth Expectations: Credo's annual sales are projected to soar 204% in fiscal 2026 from $436.77 million to $1.33 billion, reflecting its immense potential in the AI data center market.
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