VERTIV HOLDING: AI AND DATA CENTRES
Shares of Vertiv Holdings $VRT+5.0% have seen a 25% decline over the past month, which can be attributed to the broader trend in the technology sector, particularly as it relates to AI-focused stocks. Still, Wall Street is bullish on Vertiv, as evidenced by the fact that all 14 analysts who follow the company recommend its stock as a buy.
Financials and valuation
$VRT+5.0% is currently trading at 21 times estimated earnings for 2025, slightly above the average of the S&P 500, which is trading at nearly 20 times. Even so, this stock is considered an attractive investment due to its expected annual earnings growth of over 25%, well above the market average, which is estimated to be approximately 10% per year.
Market analysis and investment opportunities
Despite recent declines in the share prices of Vertiv, as well as other technology giants such as Nvidia, Alphabet, ASML and Lam Research, analysts believe that these declines may present attractive investment opportunities. $VRT+5.0% is seen as a key player in critical infrastructure for data centers and telecommunications, areas closely tied to the growing demand for artificial intelligence.
Outlook and strategy
Analyst Brett Linzey of Mizuho upgraded $VRT+5.0% from a "Hold"rating to a "Buy" rating, despite lowering the target price from $95 to $92. The move reflects a belief in the company's long-term potential despite short-term fluctuations. Linzey credits not only the financials, but also the company's strategic direction to improve operational efficiency, sustainability and expand its product portfolio, which should help Vertiv maintain a competitive advantage in the future.
Despite the recent stock decline and market jitters, Vertiv offers an attractive investment opportunity, particularly for investors focused on long-term growth in technology infrastructure and artificial intelligence. With strong growth potential and positive analyst sentiment, Vertiv could deliver solid appreciation in the coming years.
I see the share price took a ride with the CrowdStrike incident. That's the risk of doing business in the same industry. However, nothing has changed fundamentally on the company and this decline can be exploited to the maximum :)