Group 1 - The event features a presentation by Vertiv's CEO, Gio Albertazzi, followed by a Q&A session [1] - The moderator encourages audience participation by inviting questions via email or by raising hands [2]

Vertiv (NYSE:VRT) FY Conference Summary Industry Overview - Vertiv is a global leader in digital critical infrastructure, with 80% of its operations focused on the data center sector, which is experiencing strong and long-term growth [2][3] - The company has a comprehensive portfolio that includes power, thermal management, and prefabrication solutions, positioning it well in the market [2][3] Key Points and Arguments Market Position and Growth - Vertiv has a strong market position with a complete portfolio that allows it to engage with major players like NVIDIA and large colocation providers [3] - The company reported a 30% growth in backlog, indicating robust demand and a strong pipeline of future orders [5][6] - North America is currently the primary growth driver, but there are significant opportunities for expansion in other regions, particularly in AI capacity [7][8] Revenue and Order Visibility - The company has good visibility into 2026 due to strong Q3 orders and a healthy backlog, which resembles pre-existing growth patterns [5][6] - Large-scale projects, such as gigawatt-scale announcements, will be deployed in stages, with order-to-deployment cycles ranging from 9 to 15 months [10][11] Competitive Dynamics - The industry is consolidating, with several players merging, which Vertiv views positively as it leads to a more rational market [12][13] - There is no significant double ordering in the industry, as orders are tied to specific projects, reducing cancellation risks [16] Capacity Management - Vertiv is actively expanding its capacity to meet growing demand, with a focus on efficiency and productivity [17][18] - The company is addressing potential constraints in data center growth, such as power availability and skilled labor, which are being managed effectively [18][19] White Space Opportunities - The company sees significant potential in the "white space" of data centers, particularly with high-density racks that require advanced power and cooling solutions [20][21] - Recent acquisitions, such as Great Lakes, enhance Vertiv's capabilities in liquid cooling and high-voltage DC power distribution [21][22] Service and Technology Integration - Service is a critical component of Vertiv's value proposition, with a growing number of field engineers to support customer needs [27][28] - The company is investing in predictive maintenance and system optimization to enhance service offerings [28] Financial Outlook - Vertiv aims for mid-20s margin growth by the end of the decade, driven by operational leverage and efficiency improvements [30][31] - The company has a strong balance sheet, allowing for continued investment in technology and capacity expansion, including potential M&A opportunities [32][33] Collaboration and Future Technologies - Vertiv collaborates with hyperscalers and companies like NVIDIA to pioneer future technologies, such as 800 volt DC power systems [34][36] - The company is positioned to manage the transition between existing and new technologies, ensuring it remains competitive [36] Enterprise Growth Potential - There is potential for enterprise growth, particularly in leased and colocation spaces, as AI adoption increases [37] Additional Important Insights - The prefabrication capabilities of Vertiv are crucial for reducing time to market for data center owners, addressing on-site construction challenges [24][25] - The company emphasizes the importance of technology in driving growth and addressing industry challenges [25][28]

Core Insights - Current market conditions reflect a balance between optimism due to strong earnings and potential rate cuts, and caution stemming from high tech stock valuations and uncertainty regarding Federal Reserve actions [1] - Recent market pullbacks are viewed as a normal reset rather than a significant reversal, making stock selection challenging for retail investors [1] Stock Selection Strategy - A traditional stock-picking approach focusing on sales growth is recommended, as it provides a more reliable evaluation compared to earnings metrics [2][3] - Companies with impressive sales growth and strong cash flow are prioritized, with specific screening parameters including a 5-Year Historical Sales Growth greater than industry average and cash flow exceeding $500 million [6] Key Metrics for Evaluation - Price-to-Sales (P/S) Ratio should be less than the industry average, indicating better value for each dollar of revenue [7] - Positive revisions in sales estimates compared to the industry can lead to stock price increases [7] - Operating Margin should average over 5% over the last five years, reflecting effective cost control and sales growth [8] - Return on Equity (ROE) should exceed 5%, ensuring that sales growth translates into profits [9] - Zacks Rank of 1 or 2 indicates stocks likely to outperform the market [9] Highlighted Stocks - Vertiv Holdings Co (VRT) is projected to have a sales growth rate of 27.5% for 2025 and currently holds a Zacks Rank 1 [10][12] - Universal Health Services Inc. (UHS) expects a sales growth rate of 9.7% for 2025 and also holds a Zacks Rank 1 [10][13] - Aptiv PLC (APTV) anticipates a sales increase of 2.9% in 2025, with a Zacks Rank 2 [10][14] - Ameren Corporation (AEE) has a projected sales growth of 16.2% for 2025 and carries a Zacks Rank 2 [10][15] - FirstCash Holdings, Inc. (FCFS) expects a sales growth of 5.3% in 2025 and also holds a Zacks Rank 2 [10][16]

Core Viewpoint - Vertiv is positioned for growth in the data center infrastructure sector, driven by increasing AI-related investments, but current stock valuation may not reflect its earnings potential due to external cost pressures like tariffs [1][4][8]. Company Overview - Vertiv is a leader in data center infrastructure, providing power, thermal management, and IT equipment, and is collaborating with Nvidia on new power-system solutions for high-voltage direct current data centers set to launch in 2027 [2][4]. - The company has experienced a stock price increase of over 67% this year, with a market capitalization of $69 billion [3][4]. Financial Performance - Vertiv has raised its full-year sales forecast consistently, with a current guidance of $10.2 billion in sales for 2025, reflecting a 10.9% increase from earlier estimates [6]. - However, the increase in sales guidance has not translated into proportional increases in operating profit and free cash flow, with adjusted operating profit expectations rising only 6.5% and free cash flow expectations increasing by 15.4% [5][6]. Cost Challenges - The company has faced cost headwinds due to tariffs, which have impacted its ability to achieve expected profit margins. Management anticipates that these tariff-related challenges will not persist into the next year [8][11]. - The CFO has indicated that achieving low 30% incremental margins is crucial for reaching a 25% operating margin target by 2029, with an expected organic revenue CAGR of 12%-14% from 2024 to 2029 [11][12]. Market Outlook - Analysts predict a sales increase of approximately $2 billion in 2026, with an expected $638 million rise in operating profit, indicating a 32% incremental increase [9]. - The growth in AI and data center spending is expected to accelerate, with management projecting a 27% organic revenue growth in 2025 [12]. Investment Consideration - While Vertiv's current earnings may not suggest significant undervaluation, the potential for growth driven by AI and data center investments could justify its valuation if tariffs do not continue to hinder profitability [13].

Core Insights - Vertiv (VRT) and Applied Digital (APLD) are significant players in the data center infrastructure market, with Vertiv focusing on thermal and power management systems, while Applied Digital specializes in high-performance data centers optimized for AI and high computing workloads [1][2] Market Overview - The data center infrastructure management market was valued at approximately $3.06 billion in 2024 and is projected to grow at a CAGR of 17.3% from 2025 to 2030, presenting substantial growth opportunities for both Vertiv and Applied Digital [2] Vertiv (VRT) Analysis - VRT's product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbars, and modular solutions, with organic orders increasing by about 21% and a book-to-bill ratio of 1.4 times in Q3 2025, indicating strong growth prospects [3][4] - The backlog for VRT grew 12% sequentially and 30% year-over-year to $9.5 billion, driven by the rapid adoption of AI and the need for data centers to support digital transformation [3][5] - VRT's recent acquisition of Purge Rite Intermediate for approximately $1.0 billion aims to enhance its liquid-cooling and thermal-management services for AI and high-performance data centers [4] - In the Americas, VRT's organic sales surged 43% in Q3 2025, while APAC saw a 21% increase, highlighting strong demand driven by AI adoption [5] Applied Digital (APLD) Analysis - APLD is experiencing robust demand for data center infrastructure, particularly with a focus on energy efficiency [6] - The partnership with CoreWeave, initially contracted for 250 megawatts and later expanded to 400 megawatts, represents a total contract value of $11 billion over 15 years, providing strong revenue visibility [7][9] - APLD's ability to shorten construction timelines from 24 months to 12-14 months enhances its capacity to meet urgent demands from hyperscalers, who are expected to invest over $350 billion in AI infrastructure in 2025 [8][9] Stock Performance and Valuation - Year-to-date, Vertiv's shares have increased by 61.1%, while Applied Digital's shares have surged by 306.8%, attributed to strong demand and strategic partnerships [10] - Both companies are currently considered overvalued, with Vertiv trading at a trailing Price/Book ratio of 19.94X compared to Applied Digital's 8.15X [12] - The Zacks Consensus Estimate for Vertiv's 2025 earnings is $4.11 per share, reflecting a 7.31% increase over the past 30 days, while APLD is projected to report a loss of 31 cents per share [14][16] Earnings Performance - Vertiv has consistently beaten earnings estimates in the trailing four quarters, with an average surprise of 14.89%, while Applied Digital has missed estimates in two of the last four quarters, with a negative average surprise of 104.22% [17] Conclusion - Both Vertiv and Applied Digital are positioned to benefit from the data center infrastructure boom, but Vertiv's stronger earnings momentum and diversified growth drivers suggest it may offer greater upside potential in the near term [18] - Applied Digital faces challenges with rising loss estimates and customer concentration, which may temper its near-term prospects [18][19]

Core Insights - Wall Street experienced a significant decline on November 6, 2025, primarily due to a sell-off in technology stocks and concerns regarding the ongoing U.S. government shutdown, which is the largest in history [1][9] Investment Strategy - Equity investors are advised to focus on dividend growth stocks rather than high price-yielding stocks, as companies with a history of raising dividends typically demonstrate strong financial health, providing a defensive hedge against economic uncertainty [2][4] - Stocks with a strong history of year-over-year dividend growth are considered to form a healthier portfolio with greater potential for capital appreciation compared to simple dividend-paying stocks [3][6] Selected Dividend Growth Stocks - Five dividend growth stocks identified as solid investment choices include: - **Vertiv (VRT)**: Expected revenue growth of 27.5% year-over-year for 2025, long-term earnings growth rate of 30%, and an annual dividend yield of 0.08% [10][11] - **Tapestry Inc. (TPR)**: Projected revenue growth of 3.20% for fiscal 2026, long-term earnings growth rate of 7.60%, and an annual dividend yield of 1.46% [11] - **HCA Healthcare (HCA)**: Anticipated revenue growth of 7.4% for 2025, long-term earnings growth rate of 12.3%, and an annual dividend yield of 0.61% [12] - **Lam Research (LRCX)**: Expected revenue growth of 12.7% for fiscal 2026, long-term earnings growth rate of 20.3%, and an annual dividend yield of 0.63% [13] - **CBOE Global Markets (CBOE)**: Projected revenue growth of 13.2% for 2025, long-term earnings growth rate of 16.3%, and an annual dividend yield of 1.15% [14] Investment Criteria - Stocks selected for their strong fundamentals include criteria such as: - 5-Year Historical Dividend Growth greater than zero, indicating a solid dividend growth history [6] - 5-Year Historical Sales Growth greater than zero, reflecting strong revenue growth [7] - 5-Year Historical EPS Growth greater than zero, indicating solid earnings growth [7] - Next 3-5 Year EPS Growth Rate greater than zero, suggesting expected earnings growth to sustain dividend payments [7] - Price/Cash Flow less than the industry average, indicating undervaluation [8] - 52-Week Price Change greater than the S&P 500, ensuring stock appreciation [8] - Top Zacks Rank of 1 (Strong Buy) or 2 (Buy), indicating potential outperformance [8][10]

Core Insights - The article highlights the significant growth and investment in the AI sector, particularly in infrastructure development, with a focus on companies that are well-positioned for future growth in 2026 [2][3][4]. Group 1: AI Infrastructure Investment - Four of the "magnificent 7" stocks are set to invest $380 billion in 2025 for AI infrastructure, marking a 54% year-over-year increase in capital expenditure [3]. - The demand for data center capacity is surging due to the growth of cloud computing and AI, indicating a robust market for related technologies [2]. Group 2: Company Highlights Amphenol Corp. (APH) - APH specializes in AI and machine learning connectivity solutions, holding an estimated 33% market share in AI-powered data center interconnects [5][6]. - The company anticipates a revenue growth rate of 10.6% and an earnings growth rate of 17.5% for the next year, with earnings estimates improving by 11.5% in the last 30 days [9]. Western Digital Corp. (WDC) - WDC's cloud end market, which constitutes 89% of total revenue, grew by 31% in the last quarter, driven by demand for high-capacity HDDs [10]. - The company expects a revenue of $2.9 billion for the fiscal second quarter of 2026, reflecting a 20% increase due to strong data center demand [12]. - WDC has an expected revenue growth rate of -12.3% and an earnings growth rate of 49.7% for the current year, with earnings estimates improving by 10.6% recently [13]. Vertiv Holdings Co. (VRT) - VRT reported a 35% sales growth, benefiting from strong market demand and an extensive product portfolio for data centers [15]. - The partnership with NVIDIA is a key factor in VRT's strategy to provide scalable power solutions for AI data centers [16]. - The expected revenue growth rate for VRT is 20.3%, with earnings growth at 25.6% for the next year [17]. Corning Inc. (GLW) - Corning focuses on optical connectivity products, which are increasingly in demand due to the growth of AI applications and changing data consumption patterns [18][20]. - The expected revenue growth rate for Corning is 10.1%, with earnings growth at 19.8% for the next year [21]. TE Connectivity plc (TEL) - TEL is experiencing strong growth in its Industrial Solutions segment, driven by demand for AI applications and energy solutions [22]. - The expected revenue growth rate for TEL is 9.2%, with earnings growth at 16.6% for the current year [24].

Industry Overview - The artificial intelligence (AI) sector is experiencing significant growth, driven by the expansion of cloud computing and data centers, with a robust demand scenario supporting this momentum [1] - The demand for data center capacity has surged to manage and store the increasing volume of cloud computing-based data [1] Capital Expenditure Trends - Four of the "magnificent 7" stocks are set to invest $380 billion in 2025 for AI infrastructure development, marking a 54% year-over-year increase in capital spending on the AI ecosystem [2][7] - Companies involved in this investment are projecting double-digit growth in 2026, fueled by AI infrastructure and data center expansion [7] Company-Specific Insights Amphenol Corp. (APH) - Amphenol provides AI and machine learning-based connectivity solutions, holding an estimated 33% market share in AI-powered data center interconnects [4][5] - The company is expected to see revenue and earnings growth rates of 10.6% and 17.5%, respectively, for the next year, with an 11.5% improvement in earnings estimates over the last 30 days [9] Western Digital Corp. (WDC) - Western Digital's cloud end market, which constitutes 89% of total revenue, surged 31% in the last reported quarter, driven by high-capacity HDD demand [10] - The company anticipates a 20% revenue increase in fiscal second-quarter 2026, supported by strong data center demand and high-capacity drive adoption [12] - Expected revenue and earnings growth rates for the current year are -12.3% and 49.7%, respectively, with a 10.6% improvement in earnings estimates over the last week [13] Vertiv Holdings Co. (VRT) - Vertiv's sales grew by 35%, reflecting strong market demand and an extensive product portfolio that includes thermal systems and modular solutions [15] - The company has an expected revenue and earnings growth rate of 20.3% and 25.6%, respectively, for next year, with a 6.6% improvement in earnings estimates over the last 30 days [17] Corning Inc. (GLW) - Corning focuses on innovative optical connectivity products, with an expected revenue and earnings growth rate of 10.1% and 19.8%, respectively, for next year [21] - The demand for optical solutions is strong due to changing data consumption patterns and the need for faster data transfer [20] TE Connectivity plc (TEL) - TE Connectivity is benefiting from strong demand in its Industrial Solutions segment, particularly in AI applications [22] - The company has an expected revenue and earnings growth rate of 9.2% and 16.6%, respectively, for the current year, with a 7.4% improvement in earnings estimates over the last week [24]

Core Insights - Vertiv (VRT) shares have increased by 29.4% over the past three months, outperforming the broader Zacks Computer and Technology sector's growth of 15.8% and the Zacks Computers - IT Services industry's rise of 1.5% [1][9] Company Performance - Vertiv's shares have outperformed peers such as Super Micro Computer (SMCI) and Hewlett-Packard Enterprise (HPE), which saw gains of 17.1% and 1.3% respectively in the same period [2] - The company's organic orders grew approximately 21% in the trailing 12 months, with a book-to-bill ratio of 1.4 times for Q3 2025, indicating strong prospects [4] - Vertiv's backlog increased by 12% sequentially and 30% year-over-year to $9.5 billion, driven by the rapid adoption of AI and the growing need for data centers [4] Product Portfolio and Acquisitions - Vertiv's extensive product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbars, and modular solutions, with acquisitions playing a significant role in its expansion [3][7] - The company announced the acquisition of Purge Rite Intermediate for approximately $1.0 billion, enhancing its thermal management and liquid cooling services for AI and high-performance data centers [8] - In August, Vertiv acquired Waylay NV to improve AI-driven monitoring and optimization capabilities for its power and cooling systems [10] Strategic Partnerships - Vertiv's partnership with NVIDIA is a strategic advantage, with the introduction of gigawatt-scale reference architectures aimed at accelerating generative AI deployment by up to 50% [11] - The collaboration with NVIDIA also includes advancements in 800 VDC power architectures for next-generation AI factories [12] Financial Guidance - For Q4 2025, Vertiv expects revenues between $2.81 billion and $2.89 billion, with organic net sales projected to increase by 18% to 22% [13] - For the full year 2025, revenues are anticipated to be between $10.16 billion and $10.24 billion, with organic net sales growth expected between 26% and 28% [14] Earnings Estimates - The Zacks Consensus Estimate for Q4 2025 earnings is $1.28 per share, reflecting a year-over-year increase of 29.29% [15] - The estimate for 2025 revenues is $10.21 billion, indicating a growth of 27.47% year-over-year, with earnings expected to rise by 44.21% from 2024 [16] Valuation - Vertiv is currently trading at a trailing 12-month Price/Book ratio of 19.70X, significantly higher than the broader sector average of 11.89X and its peers [17] Conclusion - Vertiv's strong portfolio and partnerships are driving order growth, justifying its premium valuation, and the company holds a Zacks Rank 1 (Strong Buy) with a Growth Score of A, indicating a strong investment opportunity [19]

Group 1: AI Infrastructure Investment - The AI infrastructure segment is experiencing significant momentum, with a projected capital expenditure of $380 billion by four major companies in 2025, representing a 54% year-over-year increase in spending on the AI ecosystem [1] - The demand for data center capacity is surging due to the growth of cloud computing, indicating a robust market for AI-related investments [2] Group 2: Recommended Stocks - Five stocks are recommended for long-term investment due to their direct or indirect benefits from the AI boom: Vertiv Holdings Co. (VRT), Mirion Technologies Inc. (MIR), Comfort Systems USA Inc. (FIX), Celestica Inc. (CLS), and Corning Inc. (GLW) [2] - These recommended stocks have shown significant price increases this year and are expected to continue growing following strong third-quarter earnings results [3] Group 3: Vertiv Holdings Co. Performance - Vertiv Holdings has a Zacks Rank of 1, with a third-quarter performance driven by a diverse product portfolio, including thermal systems, liquid cooling, and modular solutions [4] - The company reported a 35% sales growth, attributed to strong market demand and enhanced capabilities to meet complex infrastructure needs [5] - Vertiv is expanding its capacity to support AI-enabled pipelines, benefiting from the digital transformation driven by AI and data center demand [5] Group 4: Strategic Partnerships - Vertiv's partnership with NVIDIA Corp. is a significant catalyst for growth, aiming to provide efficient power solutions for next-generation AI data centers [7] - The company is focused on staying ahead of GPU advancements to support the scaling of AI deployments in high-performance data centers [7]