Steven Fiorillo
Seeking Alpha Analyst, Basis Point Podcast Co-Host
Vertiv's surging orders and Q3 growth show AI infrastructure demand exceeding expectations. Per WallStEngine, revenue rose 61% to $4.3B, adjusted EPS rose 78% to $2.21, organic orders grew more than 100%, and FY26 guidance was raised above estimates. Vertiv is delivering into accelerating demand for its power and cooling equipment. x.com x.comÂ
Vertiv's power and cooling gear is benefiting from the AI data-center build-out. Q3 net sales rose 61%, operating profit 90% and net income 92%. There is no more direct picks-and-shovels bet on AI infrastructure than Vertiv. Grade: A. x.comÂ
Vertiv is a great company, supplying the power and cooling AI data centers need as rack densities climb past 100kW, with its cooling systems a major draw. Its liquid-cooling, power, heat-rejection and prefabricated modular systems bring more of the data-center stack under one roof, which could become a meaningful competitive advantage. Grid power and thermal capacity, not silicon supply, are now the limiting factor in AI. x.com x.comÂ
Vertiv's growth and cash flow make its valuation the better risk/reward than Bloom Energy at these prices. It is the one I'd buy first for a long-term hold: 23x next year's earnings with 37% EPS growth, nearly $3B in free cash flow and almost no net debt. Adjusted operating profit of $1.087B topped the $938M guidance ceiling; revenue and EPS also beat estimates. x.comÂ
Vertiv's demand is accelerating, so GLJ Research's $188 target against a $255 stock and a consensus near $350 looks badly wrong. Vertiv's orders doubled and deferred revenue just posted the biggest jump in company history; customers prepaying at records is not how a cyclical downturn starts. GLJ's similar sell call on GE Vernova as a cyclical turbine maker failed: the stock now trades above $1,000, over double its target, and its CEO is selling delivery slots for 2032. x.comÂ
Vertiv is investable only on pullbacks because its valuation is borderline rich. Fundamentals are elite: Q2 sales rose 24.1% to $3.27 billion, adjusted operating margin reached 22.6%, it has net cash and a $15 billion backlog. But GuruFocus puts fair value at $157.57 versus a $223.58 price, and the P/E of about 65x is well above the industry's 37x. Red flags include fraud investigations after the post-earnings drop, reliance on hyperscaler capex and project-timing risk. x.comÂ
Vertiv is a great company that should be a long-term winner even if it struggles short term. In the near term there is cautious optimism that it holds its new floor in the $250s. Its market cap is too high for personal buying right now, though. x.comÂ
AI data centers need cooling, electricity and transmission, sustaining the case for Vertiv, GE Vernova and Quanta Services. Vertiv's sales rose 26% in the past year; its systems cool AI chips. GE Vernova is the go-to power trade for its gas turbines. Quanta builds the lines to data centers and has a record $53B backlog. x.com x.com x.comÂ
AI infrastructure names such as Vertiv, Bloom Energy and Sterling are an attractive, asymmetric short because slowing data-center builds should slow their order growth. Semis are historically overbought, a $200 billion company jumped 40% on its CEO calling it undervalued, companies may start rationalizing AI spend, Anthropic's revenue acceleration could slow, and a $1.5 trillion space IPO looms. Any waning momentum could cause severe unraveling. This is a high-conviction playbook into September. … Show more
On-site power management would help Vertiv tackle a major AI data-center bottleneck. Its planned acquisition of UtilityInnovation Group would add that expertise alongside its power and cooling equipment. x.comÂ