1. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 92
Cramer recently called Vertiv Holdings Co (NYSE:VRT) a “pure-play’ and said:
“Data centers remain one of the hottest themes in the market, and if you’re looking for pure-play, go with Vertiv, which makes electrical equipment for these warehouses full of servers. Now that said, this stock is so red hot that it might not be able to rally on earnings unless it raises its forecast to unfathomable levels. Then again, Vertiv’s business is so strong, it’s so strong that unfathomable might be fathomable.”
Vertiv Holding (NYSE:VRT) is engaged in creating and maintaining essential digital infrastructure technologies and lifecycle services tailored for data centers, communication networks, and a range of commercial and industrial applications. After reporting a strong performance in the first half of the year, it gave an upward adjustment to its full-year sales guidance by $50 million, with $75 million of this growth attributed to organic development.
Alongside this, the company raised its full-year adjusted operating profit forecast by $85 million, now aiming for $1.435 billion. The increase is linked to a rise in sales volume and improved variable contribution margins anticipated in the latter half of the year, driven by improved productivity in both procurement and manufacturing processes.
Additionally, the company also adjusted its full-year guidance for operating margins, now projecting an adjusted operating margin of 18.7% at the midpoint. It is an increase of 100 basis points from previous estimates and 200 basis points above initial forecasts made during the November investor conference. Furthermore, the company’s forecasted adjusted diluted EPS for 2024 is set at $2.50 at the midpoint, representing over 40% growth compared to 2023, largely due to an increase in adjusted operating profit.
Vertiv Holding (NYSE:VRT) has been making significant strides in liquid cooling technology, positioning itself as an alternative to conventional energy management practices in data centers. In September, the company announced a significant expansion of its manufacturing capabilities in North America with the opening of a new facility in Pelzer, South Carolina. The site will add 215,000 square feet of production space and is expected to create up to 300 skilled jobs in the region.
The Pelzer facility will focus on the production of various infrastructure solutions, including integrated modular systems and modular power solutions, capitalizing on the company’s extensive portfolio of power, cooling, and IT infrastructure technologies designed for data centers.
While we acknowledge the potential of Vertiv Holdings Co (NYSE:VRT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VRT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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