The Hardware Story Behind the AI Revolution
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Surging Hyperscale Backlogs: Vertiv's project backlog skyrocketed to over $15 billion by the end of 2025, driven by a surge in data center orders, with Q1 revenue reaching $2.65 billion, a 30% year-over-year increase, and full-year revenue expected between $13.5 billion and $14 billion, indicating strong market demand and sustainable growth potential.
- Dominance in Liquid Cooling: Vertiv's rapid expansion in the liquid cooling market positions it as the go-to partner for high-density AI clusters, particularly with new high-capacity facilities in regions like Singapore and Malaysia, ensuring its competitive edge in future data center cooling solutions.
- Leadership in Power Infrastructure: Eaton's strong technical moat in electrical infrastructure meets the immense power demands of AI chips, achieving Q1 revenue of $7.5 billion, up 17% year-over-year, while its acquisition of Boyd Performance Materials enhances its advanced thermal management capabilities, expected to boost adjusted EPS within two years.
- Sustained AI Spending Growth: With ongoing increases in AI investments, both Vertiv and Eaton have seen impressive stock performances, rising over 25% and 85% respectively; despite facing high valuations and market volatility risks, both companies remain beneficiaries of the AI ecosystem's growth, ensuring long-term revenue visibility.
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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: 300.530
Low
195.00
Averages
206.07
High
230.00
Current: 300.530
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.
O'Reilly Automotive Shares Drop 5.4% Amid S&P 500 Decline
- Poor Stock Performance: O'Reilly Automotive's shares are down 5.4% today, making it the worst performer in the S&P 500, reflecting market concerns about its future growth and potentially impacting investor confidence.
- Year-to-Date Review: Year-to-date, O'Reilly Automotive has declined approximately 6.4%, indicating challenges the company faces in the competitive automotive parts market, which could lead to further market share loss.
- Industry Dynamics: In contrast, AutoZone's shares are down 4.5%, while Western Digital's shares have risen 7.8%, indicating varied market reactions to different companies, which may influence investors' asset allocation strategies.
- Market Sentiment Analysis: The decline in O'Reilly Automotive's stock may prompt analysts to reassess its future performance, potentially affecting its stock price trajectory and overall market sentiment, necessitating close monitoring of subsequent developments.
See More
The Hardware Story Behind the AI Revolution
- Surging Hyperscale Backlogs: Vertiv's project backlog skyrocketed to over $15 billion by the end of 2025, driven by a surge in data center orders, with Q1 revenue reaching $2.65 billion, a 30% year-over-year increase, and full-year revenue expected between $13.5 billion and $14 billion, indicating strong market demand and sustainable growth potential.
- Dominance in Liquid Cooling: Vertiv's rapid expansion in the liquid cooling market positions it as the go-to partner for high-density AI clusters, particularly with new high-capacity facilities in regions like Singapore and Malaysia, ensuring its competitive edge in future data center cooling solutions.
- Leadership in Power Infrastructure: Eaton's strong technical moat in electrical infrastructure meets the immense power demands of AI chips, achieving Q1 revenue of $7.5 billion, up 17% year-over-year, while its acquisition of Boyd Performance Materials enhances its advanced thermal management capabilities, expected to boost adjusted EPS within two years.
- Sustained AI Spending Growth: With ongoing increases in AI investments, both Vertiv and Eaton have seen impressive stock performances, rising over 25% and 85% respectively; despite facing high valuations and market volatility risks, both companies remain beneficiaries of the AI ecosystem's growth, ensuring long-term revenue visibility.
See More
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- Surge in Power Infrastructure Demand: GE Vernova and nVent Electric have raised their 2026 earnings guidance amid booming AI application growth, indicating strong market demand that is expected to significantly enhance company performance.
- GE Vernova Order Backlog: The company currently boasts a $76 billion backlog, a substantial increase from $38 billion in sales for 2025, highlighting its rapidly strengthening market position in the AI data center sector.
- nVent Electric Sales Outlook Raised: Management has increased its 2026 organic sales growth forecast from 10%-13% to 21%-23%, reflecting robust performance in the next-generation data center market, particularly in liquid cooling solutions developed in collaboration with Nvidia.
- Positive Market Reaction: Despite trading at 38 and 37 times 2026 earnings estimates, the market has reacted positively to the potential earnings upgrades due to accelerating AI investments, demonstrating strong investor confidence in power solutions.
See More
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- Surging Power Demand: The rapid growth of AI applications has significantly increased the demand for power from data centers, leading GE Vernova to outperform the former GE Aerospace business, briefly surpassing its market cap.
- Significant Order Growth: GE Vernova's equipment orders rose 106% year-over-year in Q1 2026, resulting in a backlog of $76 billion, far exceeding the $38 billion in sales for 2025, indicating strong market demand and long-term value potential.
- Optimistic Market Outlook: nVent Electric is identified by analysts as a great investment for AI data centers, with its 2026 organic sales growth outlook raised from 10%-13% to 21%-23%, reflecting robust demand for the new 800-volt direct current solutions.
- Earnings Expectations Raised: Despite high valuations for nVent Electric and GE Vernova, both companies raised their 2026 earnings guidance in their latest earnings calls, indicating market optimism regarding their future performance amid accelerating AI investments.
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- Nvidia Economic Profit: Although Nvidia's stock is only up 6% in 2026, UBS still regards it as an exemplary wealth compounder, forecasting a doubling of its economic profit by 2027, with analysts' consensus indicating over 50% upside potential from current levels.
- Ralph Lauren Recovery: Ralph Lauren's stock has rallied 13% this year, with UBS highlighting a sharp rebound in cash flow return on investment from pandemic lows, projecting a decade-high of 15%, while the market remains optimistic about its long-term growth potential with a target price suggesting an additional 7% upside.
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- Market Demand Response: The new facility will focus on producing power and cooling systems essential for data centers, supporting clients in Southeast Asia, North Asia, Australia, and New Zealand, thereby enhancing the company's competitiveness in a rapidly growing market.
- Strategic Investment Intent: CEO Giordano Albertazzi stated that expanding the manufacturing footprint aims to enhance the company's capabilities in quality, speed, scale, and resilience, reflecting a strong commitment to the Asia-Pacific market.
- Digital Infrastructure Growth: With Asia being one of the fastest-growing regions for AI and digital infrastructure investment, Vertiv's initiative is poised to solidify its market position in this sector and drive future business growth.
See More
O'Reilly Automotive Shares Drop 5.4% Amid S&P 500 Decline
- Poor Stock Performance: O'Reilly Automotive's shares are down 5.4% today, making it the worst performer in the S&P 500, reflecting market concerns about its future growth and potentially impacting investor confidence.
- Year-to-Date Review: Year-to-date, O'Reilly Automotive has declined approximately 6.4%, indicating challenges the company faces in the competitive automotive parts market, which could lead to further market share loss.
- Industry Dynamics: In contrast, AutoZone's shares are down 4.5%, while Western Digital's shares have risen 7.8%, indicating varied market reactions to different companies, which may influence investors' asset allocation strategies.
- Market Sentiment Analysis: The decline in O'Reilly Automotive's stock may prompt analysts to reassess its future performance, potentially affecting its stock price trajectory and overall market sentiment, necessitating close monitoring of subsequent developments.
See More
The Hardware Story Behind the AI Revolution
- Surging Hyperscale Backlogs: Vertiv's project backlog skyrocketed to over $15 billion by the end of 2025, driven by a surge in data center orders, with Q1 revenue reaching $2.65 billion, a 30% year-over-year increase, and full-year revenue expected between $13.5 billion and $14 billion, indicating strong market demand and sustainable growth potential.
- Dominance in Liquid Cooling: Vertiv's rapid expansion in the liquid cooling market positions it as the go-to partner for high-density AI clusters, particularly with new high-capacity facilities in regions like Singapore and Malaysia, ensuring its competitive edge in future data center cooling solutions.
- Leadership in Power Infrastructure: Eaton's strong technical moat in electrical infrastructure meets the immense power demands of AI chips, achieving Q1 revenue of $7.5 billion, up 17% year-over-year, while its acquisition of Boyd Performance Materials enhances its advanced thermal management capabilities, expected to boost adjusted EPS within two years.
- Sustained AI Spending Growth: With ongoing increases in AI investments, both Vertiv and Eaton have seen impressive stock performances, rising over 25% and 85% respectively; despite facing high valuations and market volatility risks, both companies remain beneficiaries of the AI ecosystem's growth, ensuring long-term revenue visibility.
See More
AI Data Center Growth Fuels Power Infrastructure Stock Surge
- Surge in Power Infrastructure Demand: GE Vernova and nVent Electric have raised their 2026 earnings guidance amid booming AI application growth, indicating strong market demand that is expected to significantly enhance company performance.
- GE Vernova Order Backlog: The company currently boasts a $76 billion backlog, a substantial increase from $38 billion in sales for 2025, highlighting its rapidly strengthening market position in the AI data center sector.
- nVent Electric Sales Outlook Raised: Management has increased its 2026 organic sales growth forecast from 10%-13% to 21%-23%, reflecting robust performance in the next-generation data center market, particularly in liquid cooling solutions developed in collaboration with Nvidia.
- Positive Market Reaction: Despite trading at 38 and 37 times 2026 earnings estimates, the market has reacted positively to the potential earnings upgrades due to accelerating AI investments, demonstrating strong investor confidence in power solutions.
See More
AI Demand Drives Recovery of Power Companies
- Surging Power Demand: The rapid growth of AI applications has significantly increased the demand for power from data centers, leading GE Vernova to outperform the former GE Aerospace business, briefly surpassing its market cap.
- Significant Order Growth: GE Vernova's equipment orders rose 106% year-over-year in Q1 2026, resulting in a backlog of $76 billion, far exceeding the $38 billion in sales for 2025, indicating strong market demand and long-term value potential.
- Optimistic Market Outlook: nVent Electric is identified by analysts as a great investment for AI data centers, with its 2026 organic sales growth outlook raised from 10%-13% to 21%-23%, reflecting robust demand for the new 800-volt direct current solutions.
- Earnings Expectations Raised: Despite high valuations for nVent Electric and GE Vernova, both companies raised their 2026 earnings guidance in their latest earnings calls, indicating market optimism regarding their future performance amid accelerating AI investments.
See More
UBS's Top Stock Picks for Q3 2026
- Vertiv Stock Surge: Vertiv's stock has surged 92% this year, establishing itself as a favored AI infrastructure play, with UBS analysts noting its strong cash flow return on investment and high asset growth rates, suggesting that its upward value creation trajectory remains intact.
- Nvidia Economic Profit: Although Nvidia's stock is only up 6% in 2026, UBS still regards it as an exemplary wealth compounder, forecasting a doubling of its economic profit by 2027, with analysts' consensus indicating over 50% upside potential from current levels.
- Ralph Lauren Recovery: Ralph Lauren's stock has rallied 13% this year, with UBS highlighting a sharp rebound in cash flow return on investment from pandemic lows, projecting a decade-high of 15%, while the market remains optimistic about its long-term growth potential with a target price suggesting an additional 7% upside.
- Diverse Stock Picks: UBS's list also includes Spotify, Boston Scientific, Target, and Coca-Cola, reflecting confidence in a diversified investment strategy aimed at capitalizing on opportunities arising from market recovery.
See More
Vertiv Opens New Manufacturing Facility in Malaysia
- Manufacturing Expansion: Vertiv has opened its first manufacturing facility in Johor, Malaysia, aimed at meeting the growing demand for AI and high-density computing infrastructure across Asia, with full operations expected by 2027.
- Market Demand Response: The new facility will focus on producing power and cooling systems essential for data centers, supporting clients in Southeast Asia, North Asia, Australia, and New Zealand, thereby enhancing the company's competitiveness in a rapidly growing market.
- Strategic Investment Intent: CEO Giordano Albertazzi stated that expanding the manufacturing footprint aims to enhance the company's capabilities in quality, speed, scale, and resilience, reflecting a strong commitment to the Asia-Pacific market.
- Digital Infrastructure Growth: With Asia being one of the fastest-growing regions for AI and digital infrastructure investment, Vertiv's initiative is poised to solidify its market position in this sector and drive future business growth.
See More
