Vertiv Holdings Co (VRT): A Bull Case Theory

We came across a bullish thesis on Vertiv Holdings Co (VRT) on Twitter by RadnorCapital. In this article, we will summarize the bulls’ thesis on VRT. Vertiv Holdings Co (VRT)’s share was trading at $126.17 as of Dec 9^th. VRT’s trailing and forward P/E were 89.23 and 37.74 respectively according to Yahoo Finance.

Vertiv (VRT) has emerged as a key beneficiary of the ongoing data center expansion, driven by robust demand and the nascent stages of AI-related buildouts. JPMorgan analyst Steve Tusa, bullish on Vertiv since April 2022 when shares traded below $15, underscores the transformative growth ahead. The AI revolution is fueling unprecedented demand, with a vast pipeline yet to materialize as dedicated AI installations are just beginning. However, challenges such as power availability, exemplified by Virginia’s data center capacity being essentially sold out, highlight the urgency for innovative solutions.

Vertiv’s strategic positioning as a full solutions provider, particularly in high-density liquid and air cooling technologies, sets it apart. Its innovative chiller design, featuring a larger heat transfer area and compressors optimized for high temperatures, delivers superior efficiency. Liquid cooling, poised to dominate data center cooling with an 80/20 split over air cooling, further enhances Vertiv’s growth trajectory. The shift toward modular construction to address labor shortages also plays to Vertiv’s strengths as scaled players with supply chain expertise are increasingly favored.

The scale of the AI-driven data center buildout is staggering, with one panelist describing it as a “tsunami.” Developers who once delivered 3.8 GWs over a decade now face 14 GWs of AI load in just 20 months. As the industry navigates rapid technological advancements likened to “building an aircraft in flight,” Vertiv’s pipeline of 145 GWs and its unmatched execution capabilities position it to capitalize on what could be a record-breaking mid-cycle performance year.

Vertiv Holdings Co (VRT) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held VRT at the end of the third quarter which was 92 in the previous quarter. While we acknowledge the risk and potential of VRT as an investment, our conviction lies in the belief that some 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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Disclosure: None. This article was originally published at Insider Monkey.