Chip Stocks Surge Amid AI Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy VRT?
Source: Fool
- Nvidia's Stock Surge: Nvidia's share price has skyrocketed by 1,220% over the past five years, establishing itself as a poster child for the AI spending boom, reflecting its dominant market position and robust profitability.
- Micron and Texas Instruments' Strong Performance: Micron Technologies' stock has risen 44.6% year-to-date, while Texas Instruments has increased by 21%, indicating a broader recovery in the semiconductor sector driven by AI demand and enhanced investor confidence.
- Vertiv's Business Model Transformation: Vertiv Holdings has seen its organic orders soar by 252% year-over-year, with diluted earnings per share jumping 200%, showcasing its leadership in critical digital infrastructure amid surging AI data center demand.
- Significant Future Growth Potential: Vertiv's backlog has reached $15 billion, up 109% year-over-year, with expectations that data center spending will quadruple from $1 trillion to $4 trillion between 2025 and 2030, indicating strong future growth prospects for the company.
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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: 241.780
Low
195.00
Averages
206.07
High
230.00
Current: 241.780
Low
195.00
Averages
206.07
High
230.00
About VRT
Vertiv Holdings Co. is a global provider of critical digital infrastructure. It provides mission-critical digital infrastructure technologies and lifecycle services primarily for data centers, communication networks, and commercial and industrial environments. Its offerings include alternate current (AC) and direct current (DC) power management products, switchgear and busbar products, thermal management products, integrated rack systems, modular solutions, management systems for monitoring and controlling digital infrastructure, and services. Its business segments include Americas, Asia Pacific, and Europe, Middle East & Africa. The Americas segment includes products which include AC and DC power management, thermal management, low/medium voltage switchgear, busbar, integrated modular solutions, racks, single phase UPS, rack power distribution, rack thermal systems, configurable integrated solutions, energy storage solutions, hardware, and software for managing I.T. equipment.
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.
Vertiv Holdings Poised for Strong Growth Ahead
- Significant Backlog: Vertiv exited fiscal 2025 with a $15 billion backlog, more than double year-over-year, indicating strong demand for its power and thermal management systems and suggesting sustainable revenue growth ahead.
- Robust Performance: The company reported a 22.7% year-over-year revenue increase in Q4, reaching $2.88 billion, while adjusted EPS grew 37% to $1.36, reflecting strong performance in the AI data center market.
- Strategic Investment Expansion: Vertiv plans to allocate 3% to 4% of sales as capex in fiscal 2026 to expand production capacity and advance technology, effectively converting backlog into revenue and supporting long-term growth.
- Service Business Growth: Lifecycle services orders grew over 25% year-over-year, with approximately 5,000 field personnel supporting these services, enhancing competitive advantage and providing a foundation for recurring revenue in the future.
See More
Vertiv Holdings to Join S&P 500 Index
- S&P 500 Inclusion: Vertiv Holdings will join the S&P 500 on March 23, which is expected to boost investor interest as changes in index constituents typically trigger buying from passive investment strategies.
- Data Center Partnership: Vertiv has partnered with Generate Capital to assist data center operators in deploying capacity more rapidly in power-constrained markets, particularly in response to the increasing demand from AI and high-density computing.
- Financing and Credit Facilities: The company recently completed a $2.1 billion senior unsecured notes offering and a new $2.5 billion revolving credit facility, using the proceeds to fully repay its existing secured term loan, while recent credit rating upgrades facilitated its debut investment-grade notes offering.
- Stock Price Surge: Vertiv's stock has surged over the past year, rising from below $100 in March 2025 to around $260 by early March 2026, currently trading near its 52-week high, indicating a strong upward trend.
See More
Nvidia Invests in Optical Firms Joining S&P 500
- Strategic Investment: Nvidia announced a $2 billion investment in both Lumentum and Coherent, aiming to enhance energy efficiency and resilience in AI factories through optical interconnect technology, thereby strengthening its competitive edge in data center infrastructure.
- S&P 500 Inclusion: Lumentum and Coherent's admission to the S&P 500 index marks a significant boost in their market credibility, which is expected to attract index fund purchases and drive their stock prices higher in the short term.
- Stock Price Surge: Over the past year, Lumentum and Coherent's stock prices have skyrocketed by 279% and 932%, respectively, indicating strong market confidence in their growth potential, with current P/E ratios at 34 and 45 times expected earnings.
- Technological Significance: Nvidia highlighted the critical role of optical interconnect technology in the ongoing scaling of AI networks, and this investment will secure essential data center infrastructure components to support future AI advancements.
See More
Nvidia Invests in Optics Firms Lumentum and Coherent, Both Join S&P 500
- Strategic Investment: Nvidia announced a $2 billion investment in both Lumentum and Coherent as part of a multiyear strategic partnership, which is expected to enhance its technological integration and market competitiveness in the artificial intelligence sector.
- S&P 500 Inclusion: The admission of Lumentum and Coherent into the S&P 500 index represents a significant milestone that will enhance their credibility among investors and could further boost their stock prices through passive purchases by index funds.
- Stock Price Surge: Over the past year, Coherent and Lumentum have seen their stock prices increase by 279% and 932%, respectively, indicating strong market recognition of the critical role of optical components in data centers and reflecting investor confidence in their future growth potential.
- Technological Significance: Nvidia emphasized that optical interconnect technology and package integration are crucial for the continued scaling of AI factories, and this investment not only secures essential data center infrastructure components but may also enhance overall energy efficiency and network resilience.
See More
Vertiv's Surge in Data Center Cooling Market
- Institutional Investment Surge: Since Q3 2025, 920 institutional investors have opened or expanded positions in Vertiv, with BlackRock and State Street increasing their stakes by 2.38% and 2.29%, respectively, indicating strong confidence in the company's growth prospects.
- Strong Financial Performance: In 2025, Vertiv's net sales reached $10.23 billion, a 26% increase year-over-year, exceeding guidance by $30 million, reflecting robust demand for data center cooling infrastructure.
- Profitability Improvement: Vertiv's adjusted EPS grew by 47% year-over-year, with projections for 2026 EPS to hit $6.15, showcasing the company's sustained growth potential in the AI-driven market.
- Attractive Valuation: Although the current P/E ratio stands at 73.24, down from 75.74 in 2024, its PEG ratio of 0.80 suggests that Vertiv's stock remains undervalued, attracting investor interest amid anticipated future earnings growth.
See More
Surge in Demand for Vertiv's Cooling Systems
- Investment Surge: Institutional investors are flocking to Vertiv due to skyrocketing demand for cooling systems in data centers, with 920 institutions opening or expanding positions as of September 30, 2025, indicating strong market confidence in its future growth.
- Strong Financial Performance: Vertiv's net sales reached $10.23 billion in 2025, a 26% increase year-over-year, exceeding guidance by $30 million, showcasing its robust competitiveness in the rapidly growing AI infrastructure market.
- Profitability Improvement: In Q4 2025, Vertiv's adjusted EPS surged 47% to $1.36, with projections for 2026 indicating a continued growth of 28%, further solidifying its leadership position in the industry.
- Reasonable Market Valuation: Although Vertiv's current P/E ratio stands at 73.24, down from 75.74 in 2024, its PEG ratio of 0.80 suggests that the stock remains undervalued in light of anticipated future earnings growth, attracting more investor interest.
See More
Vertiv Holdings Poised for Strong Growth Ahead
- Significant Backlog: Vertiv exited fiscal 2025 with a $15 billion backlog, more than double year-over-year, indicating strong demand for its power and thermal management systems and suggesting sustainable revenue growth ahead.
- Robust Performance: The company reported a 22.7% year-over-year revenue increase in Q4, reaching $2.88 billion, while adjusted EPS grew 37% to $1.36, reflecting strong performance in the AI data center market.
- Strategic Investment Expansion: Vertiv plans to allocate 3% to 4% of sales as capex in fiscal 2026 to expand production capacity and advance technology, effectively converting backlog into revenue and supporting long-term growth.
- Service Business Growth: Lifecycle services orders grew over 25% year-over-year, with approximately 5,000 field personnel supporting these services, enhancing competitive advantage and providing a foundation for recurring revenue in the future.
See More
Vertiv Holdings to Join S&P 500 Index
- S&P 500 Inclusion: Vertiv Holdings will join the S&P 500 on March 23, which is expected to boost investor interest as changes in index constituents typically trigger buying from passive investment strategies.
- Data Center Partnership: Vertiv has partnered with Generate Capital to assist data center operators in deploying capacity more rapidly in power-constrained markets, particularly in response to the increasing demand from AI and high-density computing.
- Financing and Credit Facilities: The company recently completed a $2.1 billion senior unsecured notes offering and a new $2.5 billion revolving credit facility, using the proceeds to fully repay its existing secured term loan, while recent credit rating upgrades facilitated its debut investment-grade notes offering.
- Stock Price Surge: Vertiv's stock has surged over the past year, rising from below $100 in March 2025 to around $260 by early March 2026, currently trading near its 52-week high, indicating a strong upward trend.
See More
Nvidia Invests in Optical Firms Joining S&P 500
- Strategic Investment: Nvidia announced a $2 billion investment in both Lumentum and Coherent, aiming to enhance energy efficiency and resilience in AI factories through optical interconnect technology, thereby strengthening its competitive edge in data center infrastructure.
- S&P 500 Inclusion: Lumentum and Coherent's admission to the S&P 500 index marks a significant boost in their market credibility, which is expected to attract index fund purchases and drive their stock prices higher in the short term.
- Stock Price Surge: Over the past year, Lumentum and Coherent's stock prices have skyrocketed by 279% and 932%, respectively, indicating strong market confidence in their growth potential, with current P/E ratios at 34 and 45 times expected earnings.
- Technological Significance: Nvidia highlighted the critical role of optical interconnect technology in the ongoing scaling of AI networks, and this investment will secure essential data center infrastructure components to support future AI advancements.
See More
Nvidia Invests in Optics Firms Lumentum and Coherent, Both Join S&P 500
- Strategic Investment: Nvidia announced a $2 billion investment in both Lumentum and Coherent as part of a multiyear strategic partnership, which is expected to enhance its technological integration and market competitiveness in the artificial intelligence sector.
- S&P 500 Inclusion: The admission of Lumentum and Coherent into the S&P 500 index represents a significant milestone that will enhance their credibility among investors and could further boost their stock prices through passive purchases by index funds.
- Stock Price Surge: Over the past year, Coherent and Lumentum have seen their stock prices increase by 279% and 932%, respectively, indicating strong market recognition of the critical role of optical components in data centers and reflecting investor confidence in their future growth potential.
- Technological Significance: Nvidia emphasized that optical interconnect technology and package integration are crucial for the continued scaling of AI factories, and this investment not only secures essential data center infrastructure components but may also enhance overall energy efficiency and network resilience.
See More
Vertiv's Surge in Data Center Cooling Market
- Institutional Investment Surge: Since Q3 2025, 920 institutional investors have opened or expanded positions in Vertiv, with BlackRock and State Street increasing their stakes by 2.38% and 2.29%, respectively, indicating strong confidence in the company's growth prospects.
- Strong Financial Performance: In 2025, Vertiv's net sales reached $10.23 billion, a 26% increase year-over-year, exceeding guidance by $30 million, reflecting robust demand for data center cooling infrastructure.
- Profitability Improvement: Vertiv's adjusted EPS grew by 47% year-over-year, with projections for 2026 EPS to hit $6.15, showcasing the company's sustained growth potential in the AI-driven market.
- Attractive Valuation: Although the current P/E ratio stands at 73.24, down from 75.74 in 2024, its PEG ratio of 0.80 suggests that Vertiv's stock remains undervalued, attracting investor interest amid anticipated future earnings growth.
See More
Surge in Demand for Vertiv's Cooling Systems
- Investment Surge: Institutional investors are flocking to Vertiv due to skyrocketing demand for cooling systems in data centers, with 920 institutions opening or expanding positions as of September 30, 2025, indicating strong market confidence in its future growth.
- Strong Financial Performance: Vertiv's net sales reached $10.23 billion in 2025, a 26% increase year-over-year, exceeding guidance by $30 million, showcasing its robust competitiveness in the rapidly growing AI infrastructure market.
- Profitability Improvement: In Q4 2025, Vertiv's adjusted EPS surged 47% to $1.36, with projections for 2026 indicating a continued growth of 28%, further solidifying its leadership position in the industry.
- Reasonable Market Valuation: Although Vertiv's current P/E ratio stands at 73.24, down from 75.74 in 2024, its PEG ratio of 0.80 suggests that the stock remains undervalued in light of anticipated future earnings growth, attracting more investor interest.
See More
