Core Insights - Vertiv Holdings (VRT) stock surged 78% over nine months, driven by rising revenues and margins, despite a decrease in its P/E multiple [2][3] Financial Performance - Revenue increased by 21%, while margins rose by 72%, despite a 13% decrease in the P/E multiple [3] - Q1 2025 adjusted EPS reached $0.64, exceeding forecasts, with revenue also surpassing expectations, leading to a 10.64% stock increase [9] - Q3 2025 EPS was $1.24, exceeding estimates, with a 29% rise in revenue and a 60% surge in organic orders [9] - Following strong Q3 results, Vertiv raised its full-year 2025 financial outlook [9] Dividend and Partnerships - The annual dividend was increased by 67% to $0.25 per share, reflecting robust financial performance [9] - Vertiv formed a partnership with Caterpillar to develop energy optimization solutions for AI data centers [9]

Industry Overview - The artificial intelligence (AI) sector, bolstered by the growth of cloud computing and data centers, is experiencing a robust demand scenario, with a significant surge in data center capacity needed to manage and store cloud-based data [1] - AI infrastructure capital expenditure (capex) is projected to exceed $1 trillion by 2028 according to Goldman Sachs and Bank of America, while JP Morgan and Citigroup forecast a cumulative total of $5 trillion by 2030. McKinsey & Co. estimates that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030 [2] Company Recommendations - Investors are advised to buy and hold five non-technology U.S. companies that are expected to benefit from the AI-driven data center boom in 2026. These companies have shown significant stock performance in 2025 [3] - The recommended companies include Comfort Systems USA Inc. (FIX), Vertiv Holdings Co. (VRT), Mirion Technologies Inc. (MIR), BWX Technologies Inc. (BWXT), and EMCOR Group Inc. (EME), all of which currently hold a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [4] Company Insights Comfort Systems USA Inc. (FIX) - FIX operates primarily in the HVAC markets and is experiencing increased demand for specialized HVAC solutions due to the data center boom driven by AI and cloud computing [7][8] - The company is expanding its data center construction work, which is becoming a significant growth driver and attracting M&A activity [10] - Expected revenue and earnings growth rates for FIX are 14.7% and 16.4%, respectively, for the next year, with a 20.1% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [11] Vertiv Holdings Co. (VRT) - VRT is a leading provider of critical digital infrastructure for data centers and is benefiting from strong market demand and an extensive product portfolio [12][13] - The company is strategically expanding its capacity to meet the growing demand for AI-enabled solutions and has made acquisitions to enhance its service capabilities [13][14] - Expected revenue and earnings growth rates for VRT are 20.7% and 26.3%, respectively, for the next year, with a 6.8% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [15] Mirion Technologies Inc. (MIR) - MIR provides radiation detection and monitoring products and is focused on expanding its reach in the nuclear energy sector [16] - The company is integrating digital technologies into its radiation safety solutions and has recently partnered with Westinghouse Electric Company [17] - Expected revenue and earnings growth rates for MIR are 24.7% and 26.5%, respectively, for the next year, with a 1.6% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [18] BWX Technologies Inc. (BWXT) - BWXT manufactures nuclear components and is benefiting from strong bookings and government contracts, particularly in the nuclear sector [19][20] - The company's total backlog reached $7.4 billion, up 119% year over year, driven by robust federal demand and a growing pipeline [21] - Expected revenue and earnings growth rates for BWXT are 14.5% and 9.9%, respectively, for the next year, with a 0.2% improvement in the Zacks Consensus Estimate for next year's earnings over the last seven days [24] EMCOR Group Inc. (EME) - EME is a leading provider of critical infrastructure to AI-powered data centers, focusing on electrical infrastructure and cooling systems [25] - The company is gaining traction in the data center construction market, which is contributing to its expanding performance obligations [26][27] - Expected revenue and earnings growth rates for EME are 5.9% and 8.6%, respectively, for the next year, with a 1.2% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [28]

Key Takeaways from the Conference Call Industry Overview - The conference focused on the industrial and materials sector, particularly in relation to data center cooling technologies and solutions. Key companies discussed include nVent Electric, Vertiv, Eaton Corp, Jabil, Motivair, Modine, and Dover. Core Insights 1. **Strong Demand** Companies reported robust backlog coverage and bookings extending into 2027 and 2028, indicating a strong demand for their products and services [1][2][3] 2. **Shift to Pre-fabricated Solutions** There is a notable shift towards pre-fabricated solutions that can significantly reduce installation times from weeks to as little as one day, addressing labor shortages and coordination challenges on-site [2][3] 3. **Importance of Services** Services, particularly in liquid cooling, are critical. Companies are leveraging AI and digital capabilities to enhance service delivery through data-driven approaches rather than traditional time-based schedules [3][4] 4. **Emergence of 800V Technology** Several companies showcased 800V technology, aligning with future silicon roadmaps, which is expected to support advanced applications like AI [3][4] 5. **Future Cooling Technologies** - Mixed opinions on two-phase cooling technology, with some seeing it as a long-term opportunity (3-7 years out) while others cite challenges [4] - Modine introduced a stainless steel chiller aimed at improving reliability and efficiency in cooling systems [4] - Immersion cooling is viewed as a niche market for the next few years [4] Company-Specific Insights nVent Electric - **Liquid Cooling Inflection Point** The company is capitalizing on the shift from air cooling to liquid cooling, with a portfolio of 10 new products and enhancements to existing solutions [9][10] - **Alignment with Hyperscalers** nVent is closely working with NVIDIA and AMD to ensure its cooling solutions align with new chip releases through 2030 [11] - **Integrated Solutions** The company is moving from selling components to providing full solutions, exemplified by their Technology Cooling System (TCS) [13] Vertiv - **Technological Innovations** Vertiv is focusing on 800V technology and has developed pre-fabricated solutions that significantly reduce installation complexity and time [17][18] - **Service Capabilities** The company has a large service team and is utilizing AI for maintenance and service scheduling, enhancing its service offerings [19] Eaton Corp - **Next-Generation DC Architecture** Eaton is developing a new DC architecture aligned with NVIDIA's 800V systems, targeting high-density power solutions [23][24] - **Scalability and Efficiency** The company emphasizes the scalability of its DC systems and aims to improve efficiency through reduced power conversion [25] Jabil - **Cold Plate Technology** Jabil's cold plate technology supports liquid cooling effectively, with expectations for continued industry relevance [30] Motivair - **Capacity Expansion** Motivair is aggressively expanding its manufacturing capabilities to meet demand, with a focus on prefabricated modular cooling solutions [34][37] Modine - **Innovative Chillers** Modine's new stainless steel chiller enhances system reliability and is designed to support liquid cooling without the need for in-row CDUs [39] Dover - **Strategic Focus** Dover's CPC division is expanding capacity and expects revenues from data centers to exceed $100 million in 2025, driven by a focus on high-reliability connectors [41][42] Risks and Valuation - **Valuation Ratings** - nVent Electric: Buy, price target of $140 [14] - Vertiv: Buy, price target of $182 [20] - Jabil: Buy, price target of $252 [32] - Dover: Buy, price target of $218 [45] - **Key Risks** Risks include potential deceleration in growth, pricing pressures, and challenges in maintaining margins due to competitive pressures and market dynamics [14][21][32][45]

Core Insights - The stock market is experiencing a pullback, particularly affecting AI and big tech stocks ahead of Nvidia's earnings release, presenting a potential buying opportunity for long-term investors [1][4][10] - Taiwan Semiconductor Manufacturing Co. (TSMC) and Vertiv are highlighted as strong AI-related investment options [2][7] Group 1: Market Overview - Wall Street's recent sell-off is driven by concerns surrounding AI stocks, particularly as Nvidia's earnings report approaches [1][4] - Despite the pullback, the Nasdaq remains significantly up, with a 45% increase since early April and a 17% rise in 2025 [3] - The market's current state is characterized by extreme fear, as indicated by CNN's Fear and Greed Index, suggesting a potential contrarian buying opportunity [10] Group 2: Taiwan Semiconductor Manufacturing Co. (TSMC) - TSMC holds a dominant position in the semiconductor industry, with a 60% share of the foundry market and 90% of advanced chip manufacturing [12][11] - The company is projected to grow its revenue by 34% in FY25 and 21% in FY26, increasing from $90 billion in 2024 to $145 billion in 2025 [16] - TSMC's adjusted earnings per share (EPS) is expected to grow by 45% in FY25 and 20% in FY26, with a recent upward revision of 12% for FY26 [16][17] - The stock is currently trading at a 15% discount to the tech sector and 30% below its highs, making it an attractive buy [21][20] Group 3: Vertiv Holdings Co. - Vertiv is recognized for its AI infrastructure solutions and has a strong partnership with Nvidia, addressing critical challenges in AI data centers [22][26] - The company anticipates revenue growth of 28% in 2025 and 21% in 2026, reaching $12.32 billion, more than doubling its sales from 2022 [26] - Vertiv's adjusted EPS is projected to grow significantly, with a 44% increase in 2025 following a 236% expansion in 2023 [26][27] - The stock has shown impressive performance, skyrocketing 1,100% in the past three years, and is currently trading at a 25% discount to its highs [27][29]

Core Insights - Vertiv (VRT) is experiencing significant growth due to the accelerating adoption of artificial intelligence (AI) and the increasing global demand for data centers [1][2][10] Financial Performance - In Q3 2025, Vertiv's net sales rose by 29% year over year to $2.68 billion, driven by the rapid expansion of AI infrastructure and the need for enhanced data storage and processing capabilities [1][10] - The company reported a robust order pipeline with organic orders growing approximately 21% over the trailing 12 months, and a book-to-bill ratio of 1.4 times for Q3 2025, indicating strong future prospects [3] - The backlog increased by 12% sequentially and 30% year over year, reaching $9.5 billion, primarily due to the rapid adoption of AI and the demand for data centers [3] Market Trends - The global acceleration of AI adoption is significantly driving demand for data center infrastructure, with the Americas experiencing a 43% organic sales growth and APAC growing by 21% in Q3 2025 [2] - The focus on energy efficiency is becoming increasingly important in the data center industry, influencing infrastructure development [6] Strategic Moves - Vertiv is expanding its product portfolio through acquisitions, recently announcing an agreement to acquire Purge Rite Intermediate for approximately $1.0 billion in cash, with potential additional earn-outs of up to $250 million, aimed at enhancing its liquid-cooling and thermal-management services [4][10] Competitive Landscape - Vertiv faces stiff competition from companies like Super Micro Computer (SMCI) and Applied Digital (APLD), which are also expanding their capabilities to serve hyperscale and enterprise AI data center deployments [5] - Super Micro Computer is leveraging its innovative Data Center Building Block Solution to provide comprehensive server and data center solutions, which may support sustainable growth in the market [7] Stock Performance and Valuation - Vertiv's shares have gained 46.7% year to date, outperforming the broader Zacks Computer & Technology sector, which appreciated by 23.6%, while the Zacks Computers - IT Services industry declined by 17.3% [8] - The stock is trading at a premium, with a trailing 12-month Price/Book ratio of 18.16X compared to the sector's 10.31X, indicating a higher valuation [11] - The consensus estimate for 2025 earnings is $4.11 per share, reflecting a 44.21% increase from the reported figure of 2024, with a Zacks Rank of 1 (Strong Buy) [13]

Core Insights - The article discusses a new strategic agreement between Vertiv and Caterpillar aimed at enhancing data center efficiency and resilience through integrated energy solutions [1] Company Collaboration - Vertiv, a leader in critical digital infrastructure, and Caterpillar, a leader in power systems, will collaborate on advanced energy optimization solutions specifically for data centers [1] Industry Impact - The partnership is expected to improve deployment timelines and overall operational efficiency within the data center industry, addressing the growing demand for reliable energy solutions [1]

Group 1 - Vertiv Holdings Co (NYSE:VRT) is highlighted as a top pick in the data center sector by Jim Cramer, particularly for its air conditioning business which is crucial for data centers [1][2] - Jim Cramer recalls a conversation with Vertiv's chairman, Dave Cote, who emphasized the stock's potential when it was priced at $16, suggesting a strong belief in its value [2] - The article acknowledges the potential of VRT as an investment but suggests that some AI stocks may offer higher returns with limited downside risk [2] Group 2 - The discussion around Vertiv is framed within the context of the AI boom and the significant role of tech hyperscalers in the market this year [2] - The article mentions a free report on AI stocks that are considered extremely cheap and beneficial from current economic policies, indicating a competitive landscape for investment opportunities [2]

Core Insights - The article discusses the importance of quality control in semiconductor manufacturing, particularly for advanced AI chips, highlighting KLA Corp.'s technology as essential for chip manufacturers serving data center clients [1][7] - It emphasizes the potential investment opportunities in lesser-known tech companies that are addressing critical AI bottlenecks, despite the focus on larger players like NVIDIA [2][5] - The long-term outlook for AI and data center spending remains positive, even amidst recent market volatility [6] Group 1: KLA Corp. - KLA's quality control suite is crucial for inspecting chips throughout the manufacturing process, ensuring accurate fabrication of each layer [7] - The company forecasts $925 million in revenue from advanced packaging services in fiscal Q1 2026, representing a 70% year-over-year increase [8] - Despite a recent stock pullback, KLA's price consolidation in a bullish wedge pattern suggests a potential breakout could be imminent [9] Group 2: ARM Holdings - ARM Holdings has a unique business model, licensing out intellectual property rather than manufacturing its own chips, positioning it strongly within the AI ecosystem [10] - The Neoverse platform has achieved a 25% penetration rate in the data center CPU market, with ARM reporting over 34% year-over-year revenue growth in fiscal Q2 2026 [11] - ARM shares have faced volatility despite record revenue, with the stock potentially approaching a short-term bottom near the 200-day simple moving average [12][13] Group 3: Vertiv Holdings - Vertiv specializes in electrical thermal management, providing liquid-cooling systems essential for scaling data centers, which generate significant heat [14] - The company's liquid-cooling solutions are claimed to be 3,000 times more efficient than traditional air-cooling systems, with a projected 20% CAGR for its addressable market through the decade [15] - Following a strong earnings report and guidance raise, Vertiv's stock has seen a pullback, likely due to profit-taking, but the long-term uptrend remains intact [16][17]

Core Insights - The data center industry is experiencing significant growth driven by AI, with some companies reporting triple-digit growth in AI sales [6][7] - Concerns about debt financing in the data center buildout are mitigated by the strong cash generation capabilities of these assets [3] - The evolution of AI usage is moving towards machine-to-machine interactions, indicating a shift in operational dynamics within industries [7][8] Company Insights - Verdictive is positioned uniquely in the data center ecosystem, providing essential components for power management and cooling systems, which are critical for operational efficiency [11][12][13] - The company specializes in advanced cooling solutions, including liquid cooling technologies that directly address heat management at the chip level [12] - Verdictive's product offerings encompass all critical components of a data center, excluding servers, making it a key player in the industry [11][13] Market Trends - The overall sentiment in the market for data centers and AI-related businesses is positive for the next five years, with expectations of continued growth [6] - Major companies like Alphabet and Nvidia are highlighted as strong performers despite market fluctuations affecting their stock prices [5][6] - The integration of AI into operational processes is expected to evolve, potentially leading to divisions within companies that operate autonomously without human intervention [8][9]

Core Insights - Investors are encouraged to focus on companies that generate strong returns after accounting for all operating and non-operating expenses, making profitable companies a smarter investment choice [1] Company Analysis - Micron Technology, Inc. (MU) has a 12-month net profit margin of 22.9%, leading the profitability screen [6][9] - Vertiv Holdings Co (VRT) has a 12-month net profit margin of 10.7%, indicating solid operating efficiency [7][9] - Corning Incorporated (GLW) has a 12-month net profit margin of 9.2%, reflecting consistent performance [10][9] Profitability Metrics - The net income ratio measures a company's profitability by reflecting the percentage of net income to total sales revenues, with a higher ratio indicating better revenue generation and expense management [3] - Additional screening parameters include Zacks Rank equal to 1, trailing 12-month sales and net income growth higher than the industry, and a strong buy percentage rating greater than 70% [4][5]