COLUMBUS, Ohio, July 16, 2025 /PRNewswire/ -- Vertiv Holdings Co. (NYSE: VRT), a global leader in critical digital infrastructure, today announced it will report its second quarter 2025 results before market open on Wednesday, July 30, 2025. The press release will contain a link to the presentation materials providing a second quarter 2025 update, which will be available on Vertiv's website at investors.vertiv.com. Vertiv's management team will discuss the results during a conference call the same day, star ...

Michael Del Monte is a buy-side equity analyst with over 5 years of industry experience. Prior to working in the investment management industry, Michael spent over a decade in professional services working across industries that include O&G, OFS, Midstream, Industrials, Information Technology, EPC Services, and consumer discretionary.Investment recommendations are built upon the entirety of the investment ecosystem rather than considering a company independently.Analyst’s Disclosure:I/we have a beneficial l ...

Industry Overview - The data center cooling market is expected to grow at a CAGR of 12.8% from 2023 to 2030, driven by the demand for coolant architectures for AI and high-performance computing [1]. Company Analysis: Super Micro Computer (SMCI) - SMCI's server and storage revenues are significantly supported by its direct liquid cooling products, achieving a production volume of over 2000 DLC racks per month [3]. - The company launched DLC-2 technology in May 2025, which offers features such as water and space savings, noise reduction, and a potential reduction in electricity costs by up to 40% [4]. - SMCI is currently facing challenges, including delayed purchasing decisions from customers and margin contraction due to increased competition from established players like HPE and Dell Technologies [5]. - The Zacks Consensus Estimate for SMCI's fiscal 2025 earnings is $2.07 per share, reflecting a year-over-year decline of 6.3% [5][6]. Company Analysis: Vertiv (VRT) - Vertiv has a robust thermal management portfolio, providing various cooling solutions that optimize performance and power utilization [7]. - The company is projected to achieve 24.91% EPS growth in FY25, driven by strong demand for AI cooling solutions [7][10]. - Vertiv continues to invest in research and capacity expansion to meet the growing needs of AI infrastructure, including the development of high-density cooling solutions for NVIDIA's platforms [9]. - The Zacks Consensus Estimate for Vertiv's fiscal 2025 revenues is $9.52 billion, indicating year-over-year growth of 18.8%, with earnings estimated at $3.56 per share, reflecting a growth of 24.91% [10][11]. Stock Performance and Valuation - Year-to-date, shares of SMCI have increased by 65.2%, while VRT shares have gained 6.3% [12]. - SMCI is trading at a forward Price to Sales ratio of 1.01X, above its median of 0.83X, whereas VRT is trading at a forward sales multiple of 4.5X, higher than its median of 4.25X [13]. Conclusion - Both SMCI and VRT are benefiting from the growth in cooling technology due to AI workloads and high-performance computing [16]. - However, VRT's financial metrics suggest it is a stronger investment choice compared to SMCI, which currently holds a Zacks Rank of 3 (Hold) versus VRT's 2 (Buy) [16].

Core Viewpoint - Vertiv is facing potential competition from Amazon in the cooling technology sector, which has led to a decline in its stock price by 7.3% following the news [1][2]. Group 1: Competition and Market Dynamics - Amazon is advancing in liquid cooling technology for its P6e-GB200 Ultra Servers, which enhances compute density and supports Nvidia Blackwell GPUs on AWS [3][4]. - The new custom liquid cooling system developed by Amazon was created in just 11 months and is now being deployed, indicating a significant move into the cooling technology space [4]. - Amazon has evaluated multiple liquid cooling solutions from other vendors but found them unsuitable for AWS, which may indirectly reference Vertiv [5]. Group 2: Implications for Vertiv - Vertiv's stock has increased approximately tenfold since 2022, largely benefiting from the AI boom, and it reported a 25% organic net sales growth in the first quarter [6]. - While Vertiv's near-term prospects appear solid, the entry of Amazon into the cooling technology market could pose challenges to its growth trajectory [6].

Core Insights - Vertiv (VRT) is becoming a significant player in the global AI infrastructure sector, providing advanced power and thermal solutions for high-density computing environments [1] Group 1: Financial Performance - Vertiv's backlog reached $7.9 billion in Q1 2025, representing a 25% year-over-year increase and a 10% sequential rise [2][11] - Revenues increased by 24.2% year-over-year to $2.04 billion, with a book-to-bill ratio of 1.4X, indicating strong order demand from hyperscalers and colocation providers [2] - For 2025, Vertiv anticipates revenues between $9.325 billion and $9.575 billion, suggesting an 18% growth at the midpoint, with organic net sales growth projected between 16.5% and 19.5% [4][11] - The Zacks Consensus Estimate for Vertiv's 2025 earnings is $3.56 per share, reflecting a 24.91% year-over-year increase [12] Group 2: Market Dynamics - The demand for AI-ready infrastructure is driving Vertiv's order momentum, supported by ongoing investments in R&D and capacity [3][11] - Vertiv's collaboration with NVIDIA on GB200 and GB300 reference designs is a key growth driver, enhancing its role in large-scale infrastructure deployments [3] - Competition is intensifying from companies like Super Micro Computer and Dell Technologies, both of which are scaling their offerings to meet the rising demand for AI infrastructure [5][6][7] Group 3: Stock Performance and Valuation - Vertiv's shares have increased by 10.8% year-to-date, outperforming the broader Zacks Computer & Technology sector, which rose by 7% [8] - The stock is trading at a premium with a trailing 12-month Price/Book ratio of 17.99X compared to the sector's 10.2X, indicating a higher valuation [9]

Core Viewpoint - Vertiv Holdings Co has received an upgrade from Melius Research to "buy" from "hold," indicating positive sentiment towards the company's prospects in the AI sector [1] Company Performance - Vertiv's stock is currently trading at $129.93, reflecting a 2.9% increase [1] - The stock has risen significantly from an annual low of $53.60 on April 7, showing a year-over-year increase of almost 40% and a projected increase of 13.5% for 2025 [1] Market Conditions - The company is expected to benefit from supplying power grids in the AI race, which is gaining momentum [1] - Options for Vertiv are currently considered affordable, with a Schaeffer's Volatility Index (SVI) of 51%, placing it in the 8th percentile of its annual range, indicating low volatility expectations [2] Performance Metrics - Vertiv has outperformed volatility expectations over the past year, as indicated by a Schaeffer's Volatility Scorecard (SVS) of 82 out of 100 [2]

Investment Rating - The industry investment rating is "Strongly Outperform the Market," indicating an expected industry index increase of over 5% in the next six months [32]. Core Insights - Oracle announced a $30 billion order and plans to expand data centers in the U.S., with multi-cloud database revenue growing at over 100% [4][7]. - CoreWeave received the first batch of NVIDIA GB300 servers, significantly enhancing AI processing capabilities and efficiency [8]. - Figma is preparing for a major IPO, projecting $749 million in revenue for 2024, with a focus on integrating AI into its design platform [9][13]. - The AI sector is experiencing a new technology cycle driven by increased computational power, model iteration, and accelerated commercialization [4]. - ByteDance's Doubao launched a new "In-Depth Research" feature, enhancing its AI capabilities for complex task processing [22][26]. Summary by Sections Oracle - Oracle's CEO stated a strong start to FY26, with multi-cloud database revenue growing over 100% and a significant contract with OpenAI expected to contribute over $30 billion annually starting FY28 [4][7]. CoreWeave - CoreWeave announced the receipt of NVIDIA's latest GB300 servers, which enhance AI model output efficiency by up to 50 times, marking a significant advancement in AI cloud services [8]. Figma - Figma aims for a $1.5 billion IPO, with 2024 revenue projected at $749 million, reflecting a 48% year-over-year growth. The platform is embedding AI to improve design efficiency [9][13]. AI Dynamics - The AI industry is witnessing a robust cycle characterized by high demand for computational power and rapid advancements in AI applications, with major companies like Oracle and CoreWeave leading the charge [4]. ByteDance - ByteDance's Doubao introduced the "In-Depth Research" feature, which allows users to process complex tasks and generate structured reports, indicating a shift towards deeper AI application capabilities [22][26].

Group 1 - Vertiv's shares increased by 19% in June, driven by positive news from partners like Nvidia, alleviating concerns over data center capital spending slowdown [1] - The debate between bulls and bears highlights differing views on the sustainability of AI and data center spending, with bears anticipating a correction and bulls believing spending is still in early stages [2][3] - Vertiv raised its full-year 2025 sales guidance to a range of $9.325 billion to $9.575 billion, indicating confidence in future performance despite a flat year-over-year order book in Q4 2024 [4] Group 2 - Nvidia reported a 73% year-over-year increase in data center-related revenue in Q1 2026, suggesting strong underlying market growth [7] - Vertiv's products are not subject to the same export control regulations as Nvidia, although rising costs from sourcing in Mexico and China pose challenges [8] - Overall, the confirmation of ongoing growth in Vertiv's end markets positively impacted its stock performance in June, positioning it well to benefit from the data center spending boom [9]

Technical Analysis - Vertiv Holdings Co. (VRT) has reached a key level of support and is showing potential for a bullish breakout as its 50-day simple moving average has crossed above its 200-day simple moving average, indicating a "golden cross" [1][2] - A golden cross is characterized by a short-term moving average crossing above a long-term moving average, typically the 50-day and 200-day, which suggests stronger breakout potential [2] Market Performance - VRT has experienced a price increase of 13.9% over the last four weeks, indicating positive momentum [4] - The company currently holds a 2 (Buy) rating on the Zacks Rank, reinforcing the bullish outlook [4] Earnings Outlook - The earnings outlook for VRT is positive, with no earnings estimates cut for the current quarter and one revision higher in the past 60 days, leading to an increase in the Zacks Consensus Estimate [4] - This positive movement in earnings estimates further solidifies the bullish case for VRT [5]

Market Overview - Markets ended higher on Wednesday, with the S&P 500 and Nasdaq Composite indices advancing by 0.47% and 0.94%, respectively, while the Dow Jones Industrial Average dropped by 10.52 points [1] - Market sentiment was positively influenced by a trade accord between the United States and Vietnam, easing concerns over prolonged trade tensions [1] Economic Indicators - A recent ADP report indicated an unexpected drop in private payrolls for June, with the private sector losing 33,000 jobs, suggesting potential challenges for the U.S. economy [2] - This decline in job numbers has raised scrutiny from investors, particularly in light of the Federal Reserve's cautious stance on interest rates [2] Investment Strategy - In the current macroeconomic environment, focusing on companies with strong financial fundamentals is crucial [3] - Relying solely on sales and earnings metrics may not yield long-term returns; a deeper analysis of a company's financial health and stability is essential for sustainable investment growth [3] Financial Analysis - A critical analysis of a company's financial background, including coverage ratios, is necessary for informed investment decisions [4] - The Interest Coverage Ratio is a key indicator used to evaluate a company's ability to pay interest on its debt, ensuring it is not over-leveraged [4][6] Interest Coverage Ratio Insights - The Interest Coverage Ratio is calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5] - A ratio lower than 1.0 indicates a company may struggle to meet its interest obligations, while a higher ratio suggests a stronger financial position [9] Company Performance - Hudbay Minerals Inc. (HBM), Sterling Infrastructure, Inc. (STRL), Molina Healthcare, Inc. (MOH), and Vertiv Holdings Co (VRT) have strong interest coverage ratios, indicating solid financial footing [10] - HBM and STRL posted over 40% EPS growth estimates, while VRT shows a growth potential of 24.9% [10] - MOH projects 8.4% sales growth and 7.9% EPS growth, despite a 19.3% stock decline over the past year [10] Stock Screening Criteria - Stocks should have an Interest Coverage Ratio greater than the industry average, a favorable Zacks Rank, and a VGM Score of A or B for better investment results [11] - Additional criteria include a minimum stock price of $5, strong historical and projected EPS growth, substantial trading volume, and a Zacks Rank of 1 or 2 [12][13] Company Highlights - Hudbay Minerals has a trailing four-quarter earnings surprise of 50% on average, with a Zacks Consensus Estimate suggesting growth of 9.2% in sales and 41.7% in EPS [14] - Sterling Infrastructure has a trailing four-quarter earnings surprise of 11.5% on average, with a projected EPS growth of 41.2% [15] - Molina Healthcare's Zacks Consensus Estimate indicates growth of 8.4% in sales and 7.9% in EPS [16] - Vertiv Holdings has a trailing four-quarter earnings surprise of 10.4% on average, with projected growth of 18.8% in sales and 24.9% in EPS [17]