After carrying the stock market higher over the last two years, Vertiv ((VRT) and Nvidia ((NVDA), two of the best performing stocks in the market, have been hammered lower by the recent stock market correction. Trade policy uncertainty, cutbacks on fiscal spending and a potential slowdown in the economy have investors feeling uneasy, adding to the volatility.Though it is impossible to know how long and how deep this correction will go, good investing principles don’t require us to predict what is going to h ...

Group 1: Alibaba (BABA) - Alibaba shares have shown significant strength since late January, driven by the announcement of a new AI model that claims to surpass DeepSeek [2] - The company's EPS outlook remains bullish, indicating positive near-term share movement [2] - AI-related product revenue has maintained triple-digit year-over-year growth for six consecutive quarters, with overall sales growth showing modest acceleration [4] - The stock has increased nearly 70% in 2025 alone, marking a welcome change for shareholders after years of negative price action [5] Group 2: Palantir (PLTR) - Palantir reported strong results, with sales of $828 million reflecting a 36% year-over-year increase and a 14% sequential rise [7] - The company experienced a 43% increase in customer count, indicating growing demand [7] - Analysts have a bullish outlook on Palantir, with EPS forecasted to soar 36% on 32% higher sales in the current fiscal year [8] - Palantir closed a record-setting $803 million in U.S. commercial total contract value (TCV), up 130% year-over-year and 170% sequentially [9] - U.S. commercial and government revenue grew by 64% and 45%, respectively [9] Group 3: Vertiv (VRT) - Vertiv has demonstrated solid growth, with EPS soaring 77% and sales increasing by 26% in the latest period [10] - The company raised its full-year 2025 sales guidance, reflecting approximately 16% year-over-year growth [12] - Positive revisions in the company's current fiscal year sales estimate have been noted throughout the past year [12] Group 4: Overall Market Trends - Stocks like Alibaba, Palantir, and Vertiv have gained significant attention due to their exposure to AI, contributing to their popularity among investors [6] - Alibaba's performance is also seen as a stronger play on the overall recovery in China [15]

It's been a while since data center equipment company Vertiv's (VRT 1.35%) stock looked like a great value, but that time has come around again. The ongoing demand for artificial intelligence (AI) applications creates unprecedented data growth, which only means more investment in data centers.The good news is that the broad-based sell-off in the Nasdaq Composite (^IXIC 0.81%) and some near-term negative news have brought stocks like Vertiv back into value range, and now could be a great time to buy the stoc ...

I am a full-time analyst interested in a wide range of stocks. With my unique insights and knowledge, I hope to provide other investors with a contrasting view of my portfolio, given my particular background.If you have any questions, feel free to reach out to me via a direct message on Seeking Alpha or leave a comment on one of my articles.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the ...

Group 1 - The AI trade has experienced a decline following China's DeepSeek AI announcement in February, which significantly impacted the Information Technology, Utilities, and Industrials sectors [1] - Industries directly related to power-demand needs due to AI are particularly affected by this announcement [1] Group 2 - No relevant content available for this section.

Core Insights - Vertiv is positioned at the forefront of the increasing investment in data centers that are tailored for artificial intelligence applications [1] Group 1 - The company is experiencing a significant boom in demand due to the rise in spending on AI-optimized data centers [1]

Core Viewpoint - Vertiv's shares declined by 18.7% in February due to a sell-off in AI and data center stocks, compounded by disappointing fourth-quarter earnings [1] Group 1: Market Dynamics - The release of DeepSeek's cost-effective AI model raised concerns about potential negative revisions in AI-driven data center spending [2] - The sell-off affected various sectors related to data centers, including power generators and chip designers, but Vertiv's Executive Chairman argued that lower computing costs could lead to increased demand for data centers, which would benefit Vertiv [3] Group 2: Company-Specific Issues - Vertiv's trailing-12-month orders increased by 30%, and its backlog also rose by 30% at the end of 2024 compared to the end of 2023, but fourth-quarter orders were approximately flat compared to the same quarter last year [4][5] - The CEO acknowledged delays in EMEA orders due to regulatory changes and slower decision-making processes, which may be linked to new energy-efficiency regulations set to take effect in 2025 [5] - The current situation may reflect order delays rather than a decrease in end demand, suggesting that orders could still be fulfilled in the future [6]

Core Viewpoint - Vertiv (VRT) shares have declined 24% year to date, underperforming the broader Zacks Computer and Technology sector and the Zacks Computers - IT Services industry, both of which have seen a 6% decline [1][2]. Company Performance - VRT shares are currently considered overvalued with a Value Score of C, trading at a 12-month price/book ratio of 13.51, which is higher than its median of 11.22 and the sector's 9.83 [5]. - Technically, Vertiv shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend [8]. Growth Prospects - Vertiv's extensive product portfolio, including thermal systems, liquid cooling, UPS, switchgear, busbar, and modular solutions, is enhancing its growth prospects. The backlog at the end of 2024 was $7.18 billion, reflecting a 30% increase over 2023 [12]. - The company has seen organic orders grow approximately 30% in the trailing 12 months, with a book-to-bill ratio of 1.2 times for 2024 [12]. - Strong capital expenditure plans by hyperscalers for data center capacity expansion are favorable for Vertiv, supported by a rich partner base including companies like NVIDIA and Intel [14]. Acquisitions and Innovations - Vertiv has been proactive in acquisitions, recently acquiring centrifugal chiller technologies from BiXin Energy Technology, which enhances its solutions for high-performance computing and AI [15]. Financial Outlook - For 2025, Vertiv expects organic sales growth between 15% and 17%, with net sales projected to be between $9.13 billion and $9.28 billion, indicating a year-over-year growth of 15.07% [16][17]. - Adjusted operating profit for 2025 is expected to be between $1.91 billion and $1.96 billion, with an adjusted operating margin anticipated to be 20.8-21.2% [17]. - Adjusted earnings for 2025 are expected to be between $3.50 and $3.60 per share, with a consensus estimate of $3.59 per share, indicating a year-over-year growth of 25.96% [18]. Quarterly Estimates - For Q1 2025, adjusted earnings are expected to be between 57 cents and 63 cents per share, with a consensus estimate of 62 cents per share, reflecting a year-over-year growth of 44.2% [19]. - Net sales for Q1 2025 are projected to be between $1.9 billion and $1.95 billion, indicating a year-over-year growth of 16.9% [19]. Conclusion - Vertiv is benefiting from a strong portfolio and a rich partner base, driving order growth. The solid top-line growth potential justifies a premium valuation, with a Zacks Rank 2 (Buy) and a Growth Score of A, indicating a strong investment opportunity [21].

Core Insights - The AI trade has faced a temporary setback, with companies like NVIDIA, Vertiv, and Palantir experiencing negative price action after strong performances [1][18] - Despite recent selling pressure, the underlying demand for AI-related products and services remains robust, indicating potential investment opportunities [18][19] NVIDIA (NVDA) - NVIDIA's Data Center revenue reached a record $35.6 billion, reflecting over 90% year-over-year growth and 16% sequential growth, surpassing consensus estimates by $2.0 billion [4][3] - The current PEG ratio of 1.0X is below the five-year median of 2.5X, indicating an attractive valuation [6] - The EPS outlook remains bullish, contributing to a favorable Zacks Rank 2 (Buy) [6] Palantir (PLTR) - Palantir reported sales of $828 million, a 36% year-over-year increase and a 14% sequential increase, driven by a 43% rise in customer count [7][11] - The company closed a record $803 million in U.S. commercial total contract value, up 130% year-over-year and 170% sequentially [11] - The current PEG ratio of 4.7X is high but has decreased from a peak of 7.2X last month, with a bullish EPS outlook forecasting a 31% increase in earnings for the current fiscal year [12][11] Vertiv (VRT) - Vertiv exceeded consensus EPS and sales expectations, with EPS increasing by 77% and sales rising by 26%, indicating strong underlying demand [13] - The company raised its full-year 2025 sales guidance to a range of $9.1 - $9.3 billion, suggesting approximately 16% year-over-year growth [13] - The current PEG ratio of 0.8X reflects a favorable valuation, matching the five-year median but remaining below the five-year high of 1.4X [17]

Group 1: Stock Performance - Shares of AI-related companies such as Taiwan Semiconductor Manufacturing (TSMC), Arista Networks, and Vertiv Holdings experienced significant declines, with TSMC down 4.19%, Arista down 7.57%, and Vertiv down 10.26% as of 3:52 p.m. ET [1] - Nvidia, a key player in the AI sector, also saw a decline of approximately 9.8% during the same period, impacting related stocks [1] Group 2: Economic Factors - The decline in stock prices is attributed to broader economic factors, including the imminent tariffs on Canada, Mexico, and China, which were confirmed by President Donald Trump [2][3] - Concerns over stagflation, characterized by slowing economic growth and rising prices, were heightened by the ISM Manufacturing Survey, which reported a manufacturing index of 50.3, lower than January's 50.9 and below economists' expectations of 50.8 [4][5] Group 3: Industry-Specific Concerns - The manufacturing employment index fell to 47.6 from 50.3, indicating potential job losses in the sector, which could further exacerbate fears of stagflation [5][6] - Renewed concerns over the sustainability of Nvidia's growth were noted, particularly in light of reports that China has been circumventing U.S. export controls to procure Nvidia chips [7][8] Group 4: TSMC's Investment and Market Sentiment - TSMC announced a $100 billion investment in the U.S., which, while potentially positive, raised concerns about the necessity of such capacity and the lack of subsidies associated with the investment [10][11] - The announcement was perceived as a strategy to mitigate tariff threats on Taiwan, where TSMC's production is primarily based [10] Group 5: Geopolitical Context - The semiconductor industry is heavily influenced by geopolitical factors, with the potential for stricter export controls on semiconductors looming [9][13] - The importance of securing AI supremacy is emphasized, suggesting that companies delivering value in this space may see growth in the medium term despite current market volatility [14]