Key Points
- Vertiv Holdings provides power management and cooling solutions essential for AI data centers.
- The company announced two strategic acquisitions this month.
- Vertiv raised its 2026 guidance and is seen as reasonably valued.
Artificial intelligence has become the primary catalyst for the current market rally, and its expanding adoption continues to generate new investment opportunities. The impact spans multiple layers, from processing chips and data‑center infrastructure to the power distribution and cooling systems that keep those facilities operational.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout.
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Two new acquisitions
Vertiv signed agreements this month to acquire UtilityInnovation Group, a provider of data‑center microgrids, and Ireland‑based King Environmental, which offers liquid‑cooling services and testing across Europe, the Middle East, and Africa. The UtilityInnovation transaction is projected to contribute positively to adjusted earnings in the first quarter after closing, while the King Environmental deal expands Vertiv’s global cooling footprint.
In the second quarter, Vertiv delivered robust financial results: net sales rose 24% to $3.3 billion, earnings increased 53% to $1.27, and adjusted earnings per share climbed 60% to $1.51. Operating cash flow surged 241% to $1.1 billion, and free cash flow more than doubled, reaching $925 million. The company ended the quarter with $5.6 billion in liquidity.
A strong buy
Vertiv projects free cash flow between $2.4 billion and $2.6 billion for 2026, representing roughly a 32% increase at the midpoint. The company also raised its full‑year guidance, now expecting 37% revenue growth and 60% adjusted earnings growth, driven by a strong project backlog. Management has targeted a 20%‑22% compound annual revenue growth rate through 2030. Despite occasional public resistance to data‑center development, demand remains high and funding continues to flow, reinforcing Vertiv’s market position. The stock, which has pulled back in recent sessions, now trades at a forward P/E of 27 and a five‑year PEG below 1, suggesting a compelling long‑term valuation. Overall, Vertiv appears to be a solid investment candidate.
