Core Viewpoint - Vertiv Holdings Co reported strong financial results for the second quarter of 2025, with significant growth in net sales and operating profit, driven by robust demand in the data center market and strategic investments in capacity and innovation [1][2][3]. Financial Performance - Net sales for Q2 2025 reached $2,638 million, a 35% increase ($685 million) year-over-year, attributed to strong data center demand [1][10]. - Operating profit increased by $106 million to $442 million, up 32% from the prior year, while adjusted operating profit grew by $108 million to $489 million, representing a 28% increase [2][10]. - Adjusted diluted EPS for Q2 2025 was $0.95, a 42% increase from Q2 2024 [10]. Orders and Backlog - Organic orders increased approximately 15% year-over-year and 11% sequentially from Q1 2025, with a trailing twelve-month (TTM) organic order growth of approximately 11% [1][10]. - The backlog strengthened to $8.5 billion, with a book-to-bill ratio of approximately 1.2x for the quarter [1][10]. Strategic Initiatives - The company is strategically investing in capacity expansion and innovation, particularly in AI-enabled infrastructure, to capitalize on data center growth [3][6]. - Vertiv announced an agreement to acquire Great Lakes Data Racks & Cabinets, which is expected to enhance its position in the high-density data center market [3][5]. Guidance and Outlook - The company raised its full-year 2025 guidance, expecting organic sales growth of 24%, adjusted operating profit of $1,990 million, and adjusted free cash flow of $1.4 billion [7][8]. - For Q3 2025, projected net sales are between $2,510 million and $2,590 million, with organic net sales growth expected between 20% and 24% [8][10]. Cash Flow and Liquidity - Net cash generated by operating activities in Q2 2025 was $323 million, with adjusted free cash flow of $277 million, each decreasing by approximately $59 million from Q2 2024 [4][10]. - The company maintains a robust financial position with $2.5 billion in liquidity and a net leverage of approximately 0.6x at the end of Q2 2025 [5][10].

Core Viewpoint - Vertiv (VRT) is expected to report strong second-quarter 2025 results, with revenues projected between $2.325 billion and $2.375 billion, reflecting significant organic sales growth driven by AI demand and strong performance in key regions [2][10]. Financial Expectations - Revenues for Q2 2025 are anticipated to be between $2.325 billion and $2.375 billion, with organic net sales growth expected in the range of 19% to 23% [2][10]. - The Zacks Consensus Estimate for second-quarter revenues is $2.28 billion, indicating a year-over-year growth of 16.60%, while the consensus for earnings is 83 cents per share, reflecting a 23.88% year-over-year growth [3]. Market Position and Performance - Vertiv has outperformed the Zacks Computer & Technology sector, gaining 19.3% year to date compared to the sector's 10.8% rise and the Computer IT Services industry's decline of 9.2% [7]. - The company has consistently beaten earnings estimates, with an average earnings surprise of 10.42% over the last four quarters [3]. Growth Drivers - The company is capitalizing on robust AI-driven order growth, particularly in thermal management solutions for data centers, which aligns with its strengths [4]. - Strong sales growth is expected across key regions, with a projected 5% sequential quarterly growth and 21% year-over-year growth in sales for Q2 2025, driven by performance in the Americas and APAC regions [5]. Product and Partnership Expansion - Vertiv's expanding portfolio includes energy-efficient solutions, such as the 142KW cooling and power reference architecture for NVIDIA's platform, enhancing its market offerings [6]. - The company has a rich partner base, including collaborations with NVIDIA and Oklo, which are key catalysts for growth in advanced power and thermal management solutions [6][18][19]. Valuation and Market Sentiment - Despite strong growth prospects, VRT's valuation appears stretched, with a price/book ratio of 18.71, significantly higher than the sector's average of 10.49 [10][13]. - The stock is currently trading above its 50-day and 200-day moving averages, indicating a bullish trend [11].

Core Insights - Dividends provide a passive income stream and reflect a form of 'payday' in the market, appealing to investors [1] - Several AI-related stocks, including Broadcom, Vertiv, and NVIDIA, offer dividend payments, making them attractive for income-focused investors [2][6] Company Summaries Vertiv - Vertiv specializes in services for data centers and communication networks, with a strong portfolio in power, cooling, and IT infrastructure solutions [3] - Analysts have raised EPS expectations for Vertiv, with a current estimate of $3.56, indicating a 25% year-over-year growth [3] - Revenue is projected to grow by 18% year-over-year, reflecting strong demand, although the current dividend yield is modest at 0.1% [5] Broadcom - Broadcom is enhancing its AI infrastructure capabilities, focusing on high-performance, low-power custom AI accelerators [8] - The company has increased its dividend payout six times in the past five years, resulting in a 13.3% annualized growth rate [9] - AI revenue reached $4.4 billion, a 46% increase year-over-year, with free cash flow of $6.4 billion, up 44% year-over-year [12] NVIDIA - NVIDIA has experienced significant growth in its Data Center products, with sales reaching $39.1 billion, a 73% increase from the previous year [14] - Similar to Vertiv, NVIDIA's shares yield a modest 0.1%, but the stock is considered a strong play in the AI sector [18] - The combination of growth potential and income-generating capabilities makes NVIDIA a prime choice for investors [19]

Core Insights - Zacks Premium provides various tools to help investors make informed decisions in the stock market, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - The Zacks Style Scores are indicators designed to assist investors in selecting stocks with the highest potential to outperform the market within 30 days, rated from A to F based on value, growth, and momentum [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] Value Score - The Value Score identifies attractive and discounted stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [4] Growth Score - The Growth Score evaluates a company's future prospects and financial health by analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Score helps investors capitalize on price trends by assessing factors like one-week price changes and monthly earnings estimate changes [6] VGM Score - The VGM Score combines the three Style Scores to identify stocks with the best value, growth potential, and momentum, serving as a strong indicator alongside the Zacks Rank [7] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [8][9] Stock to Watch: Vertiv Holdings Co. (VRT) - Vertiv is a global provider of critical digital infrastructure and services, serving various essential industries such as cloud computing, healthcare, and energy [12] - Currently rated 3 (Hold) on the Zacks Rank, Vertiv has a VGM Score of B and a Momentum Style Score of A, with shares increasing by 8.3% over the past four weeks [12][13] - Recent upward revisions in earnings estimates for fiscal 2025 have led to a consensus estimate increase of $0.01 to $3.56 per share, with an average earnings surprise of +10.4% [13]

Group 1 - Vertiv appointed Shen Wei as President of Greater China, effective July 22, 2025 [1] - Shen Wei has nine years of experience as Vice President and General Manager at Gates Corporation and held multiple leadership roles at Eaton Electrical [1] - CEO Gio Albertazzi highlighted Shen Wei's ability in business transformation and his leadership style focused on execution, customer-centricity, and collaboration [1][3] Group 2 - Shen Wei replaces Cui Yibin, who has served as President of Greater China since 2022 and laid a solid foundation for the region's growth [3] - Vertiv provides innovative technology solutions and services for data centers, communication networks, and commercial and industrial facilities [3] - The company offers a comprehensive product portfolio covering power, cooling, and IT infrastructure, supporting clients from cloud to edge [3][4] Group 3 - Vertiv integrates hardware, software, analytics, and ongoing services to ensure critical applications run continuously and perform optimally [4] - The company addresses significant challenges faced by data centers, communication networks, and commercial and industrial facilities [4] - Vertiv is headquartered in Westerville, Ohio, and operates in over 130 countries [4]

Core Insights - Vertiv's cloud and AI-infrastructure business focuses on thermal, power, and integrated rack systems, supporting high-density compute environments in data centers and edge deployments [1] - The company has agreed to acquire Great Lakes Data Racks & Cabinets for $200 million, enhancing its Integrated Rack Solutions segment [2][3] - The acquisition is expected to close in Q3 2025 and is valued at approximately 11.5 times Great Lakes' projected 2026 EBITDA [2][10] - This move positions Vertiv to capture increased demand for integrated, high-density systems as AI and edge-computing infrastructure scales globally [4] Company Performance - Vertiv's shares have increased by 13.6% year to date, outperforming the broader Zacks Computer & Technology sector, which has appreciated by 9.6% [8] - The company's stock is trading at a trailing 12-month Price/Book ratio of 18.45, compared to the sector's 10.44 [11] - The Zacks Consensus Estimate for second-quarter earnings is 83 cents per share, indicating a year-over-year growth of 23.88% [14]

Core Insights - Vertiv has appointed Wei Shen as the new president of Greater China, effective July 22, 2025, succeeding Edward Cui [1][3] - Wei Shen brings extensive experience from Gates Corporation and Eaton Electrical, focusing on business transformation and operational excellence [2][3] - Vertiv specializes in critical digital infrastructure, providing solutions for data centers, communication networks, and industrial facilities [4][5] Company Overview - Vertiv offers a comprehensive portfolio that includes power, cooling, and IT infrastructure solutions, enabling continuous operations and scalable growth for customers [4][5] - The company operates in over 130 countries and is headquartered in Westerville, Ohio, USA [5]

Investment Plans - Trump announced an investment plan exceeding $92 billion in Pennsylvania, focusing on AI infrastructure and energy projects, surpassing the previously announced $70 billion[1][6] - Blackstone Group is expected to invest $25 billion in data centers and energy infrastructure development[1][6] - Amazon plans to invest $20 billion in a new large data center and support upgrades for the Susquehanna Nuclear Power Plant[2][6] Market Trends - Pennsylvania is rapidly developing as a data center cluster, with confirmed investments totaling approximately $15 billion from various consortiums[2][6] - By 2025, U.S. super data center operators' capital expenditure is projected to increase by 34% year-on-year, reaching $257 billion[3][7] - The U.S. power grid is aging, with over 75% of equipment in service for more than 30 years, necessitating urgent updates[3][8] Equipment Demand - GE Vernova and Siemens Energy reported strong order backlogs of $76.3 billion and €52 billion, respectively, with significant year-on-year growth in new orders[4][9] - The market for dispatchable power generation and grid equipment remains robust, with GE Vernova expected to exceed 60GW in gas turbine contracts by year-end[4][9] Investment Recommendations - Companies benefiting from policy-driven tax reductions and capacity expansion investments include Vistra, Constellation, and Siemens Energy[5][10] - Risks include lower-than-expected demand for U.S. infrastructure and potential geopolitical risks affecting the AI sector[5][11]

Core Insights - Vertiv has announced an agreement to acquire Great Lakes Data Racks & Cabinets for $200 million, aiming to strengthen its leadership in high-density integrated infrastructure offerings [1][2] - The acquisition is expected to enhance Vertiv's ability to deliver AI-ready rack solutions optimized for various computing markets, including enterprise, edge, colocation, and hyperscale AI [2][4] Financial Overview - The purchase price represents approximately 11.5 times the expected 2026 EBITDA, factoring in cost synergies and cross-selling opportunities [2] - The transaction is anticipated to close in the third quarter of 2025, subject to customary closing conditions and regulatory approvals [5] Company Background - Great Lakes, established in 1985 and headquartered in Edinboro, PA, operates manufacturing and assembly facilities in the U.S. and Europe, offering a range of data rack enclosures and integrated infrastructure solutions [3] - The acquisition will enhance Vertiv's end-to-end critical digital infrastructure offerings, providing a comprehensive set of products and services for data center needs [3][4] Strategic Implications - The integration of Great Lakes' expertise with Vertiv's existing portfolio is expected to deliver significant customer benefits, including faster deployment, enhanced operational efficiency, and improved scalability for AI and edge computing applications [4] - Vertiv aims to position itself as a premier technology solutions provider in the critical white space market through this acquisition [4]

Core Insights - The rapid advancement of AI technology is driving the demand for high-capacity computing clusters, entering the megawatt-level era, where solving computing power needs is crucial for gaining a competitive edge in the AI sector [1][2] Group 1: AI Data Center Development - AI data centers are expected to transition into a high-density megawatt era, facing new challenges in power supply and cooling infrastructure, requiring preparation in power chain reconstruction and hybrid cooling solutions [2] - The Chinese intelligent computing market is accelerating, with expanding computing power scale and optimized structure, but challenges such as rapid electricity consumption growth and application implementation difficulties remain [3] - The construction of intelligent computing centers is characterized by a "333" trend, indicating three forms, three main bodies, and three standards, necessitating higher infrastructure requirements across training, inference, and IDC dimensions [5] Group 2: Power and Cooling Solutions - The power supply chain faces severe challenges in capacity, heat dissipation, and reliability due to the rapid increase in cabinet power density in intelligent computing centers [4] - Liquid cooling applications must focus on five key factors: feed temperatures, flow rate, filtration, fluid selection, and fault prevention and detection [6] - Vertiv's 360AI solution encompasses energy management, thermal management, prefabrication, software, and services, ensuring efficient operation of intelligent computing centers [9] Group 3: Lifecycle Services and Innovations - The integrated service model for intelligent computing centers, covering construction, operation, and maintenance, effectively reduces total cost of ownership (TCO) and enables rapid deployment and stable operation [10] - Vertiv's new products showcased at the event include advanced energy management and thermal management solutions, designed to support high-density computing needs and enhance operational efficiency [11][12] - The company emphasizes a flexible and resilient energy system, with high efficiency and low environmental impact, supporting the construction of intelligent computing centers [12][14]