Core Insights - Vertiv (VRT) and Super Micro Computer (SMCI) are key players in the data center market, particularly in AI data center infrastructure and liquid cooling solutions [1][2] - The global data center market is projected to grow from $269.79 billion in 2025 to $584.86 billion by 2032, with a compound annual growth rate of 11.7% [2] Vertiv (VRT) Overview - Vertiv is experiencing significant growth due to the rising demand for data center infrastructure driven by AI adoption, with a 43% organic sales growth in the Americas and 21% in APAC in Q3 2025 [3][4] - The company reported a 21% growth in organic orders and a book-to-bill ratio of 1.4 times for Q3 2025, with a backlog of $9.5 billion, reflecting strong demand [4] - Vertiv's diverse product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbar, and modular solutions, bolstered by strategic acquisitions [5] - A partnership with Caterpillar aims to enhance energy efficiency and accelerate data center deployment through integrated power and cooling solutions [6] Super Micro Computer (SMCI) Overview - SMCI is capitalizing on the increasing deployment of AI and high-performance computing (HPC) workloads, with rising demand for its energy-efficient servers [7] - The company leads in liquid cooling technologies, which can reduce power and water usage by up to 40%, essential for large-scale AI deployments [8] - SMCI's Data Center Building Block Solution (DCBBS) provides a comprehensive, plug-and-play solution for AI-ready data centers, optimizing performance and reducing power consumption [9][10] Performance Comparison - In the last six months, VRT shares increased by 56%, while SMCI shares decreased by 21.5%, attributed to VRT's extensive product offerings [11] - SMCI's revenue and earnings declined by 15.5% and 56% respectively in fiscal Q1 2026, contributing to its share price drop [12] - Valuation metrics indicate VRT shares are overvalued with a Price/Sales ratio of 5.59X, while SMCI shares are considered cheap at 0.51X [15] Earnings Estimates - The Zacks Consensus Estimate for VRT's 2025 earnings is $4.11 per share, reflecting a 44.21% year-over-year increase, while SMCI's estimate for fiscal 2026 is $2.16 per share, indicating a 4.85% increase [19] - VRT has consistently beaten earnings estimates with an average surprise of 14.89%, compared to SMCI's average surprise of 5.80% [20] Conclusion - Both companies are benefiting from the growing data center infrastructure market, but VRT shows greater upside potential due to its strong portfolio and earnings momentum [21] - SMCI faces challenges from trade restrictions and competition, along with lingering concerns from past accounting issues [21][22]

One market professional following the stock feels that it's no longer a buy.Investor sentiment in data center infrastructure specialist Vertiv (VRT 8.19%) was affected mid-week by an analyst's recommendation downgrade. With that tailwind, Vertiv's shares were slumping by almost 15% week-to-date in mid-session action on Friday, according to data compiled by S&P Global Market Intelligence. Fairly priced now, says prognosticatorThat change in recommendation came from Wolfe Research's Nigel Coe, who, on Wednesd ...

Vertiv Holdings Co (NYSE:VRT) is one of the Hot AI Stocks on Wall Street’s Radar. On December 9, Wolfe Research downgraded the stock from Outperform to “Peerperform” without a price target. After an extended period of outperformance, the firm sees a balanced risk-reward profile for the stock. Wolfe Research noted that this is the first time that they are not recommending the stock since December 2022. Analysts noted that after a period of outperformance, “the stock now looks balanced in our bull vs. bear ...

Core Insights - The U.S. economy is experiencing persistent inflation and slowing job growth, leading the Federal Reserve to cut interest rates for the third time this year, while tariffs and supply-chain issues are impacting economic growth [1] - Retail investors are finding it challenging to interpret market signals and achieve solid returns in the current environment [1] Stock Selection Strategy - Traditional stock-picking methods focusing on sales growth are recommended, as sales growth offers a more reliable evaluation compared to earnings metrics [2][3] - Companies such as Vertiv Holdings Co (VRT), RenaissanceRe Holdings Ltd. (RNR), Ameren Corporation (AEE), Canadian Natural Resources Limited (CNQ), and FedEx Corporation (FDX) are highlighted for their strong sales growth and solid cash flow positions [2][10] Importance of Sales Growth - Sales growth is a clear indicator of a company's business momentum, reflecting genuine demand and market position [3] - Consistent sales growth can predict future earnings improvement and shareholder value creation [3][4] - Revenue trends are valuable both absolutely and relatively, supporting predictable cash flows and enabling management to reinvest in operations [4] Screening Criteria for Stocks - Stocks are shortlisted based on criteria including 5-Year Historical Sales Growth greater than industry average and Cash Flow exceeding $500 million [5] - Additional factors include a Price-to-Sales (P/S) ratio lower than the industry average, positive sales estimate revisions, high operating margins, and Return on Equity (ROE) above 5% [6][7][8] Highlighted Stocks - Vertiv (VRT) is expected to have a sales growth rate of 27.5% for 2025 and holds a Zacks Rank 1 [10][11] - Ameren (AEE) is projected to grow sales by 17.7% in 2025 and has a Zacks Rank 2 [10][13] - Canadian Natural Resources (CNQ) anticipates a sales growth of 5.9% for 2025, also holding a Zacks Rank 2 [10][14] - FedEx (FDX) expects a sales increase of 4.6% in fiscal 2026, with a Zacks Rank 2 [10][15] - RenaissanceRe (RNR) has a lower expected sales growth of 3.4% for 2025 but maintains a Zacks Rank 1 [10][12]

Core Insights - The data center infrastructure market is projected to reach $1 trillion by 2030, driven by significant investments in AI and emerging technologies like quantum computing [1][4]. Industry Overview - The demand for data centers is surging due to AI infrastructure investments, with industry leaders confirming operations are at capacity [2]. - Future growth in the data center sector is expected to be propelled by advancements in quantum computing, which may surpass the current AI infrastructure demand [3][4]. Company Developments - Supermicro has expanded its Nvidia Blackwell portfolio by launching new liquid cooling systems that capture 98% of system heat, indicating a trend towards advanced cooling solutions [5]. - Vertiv Holdings Co. completed its acquisition of PurgeRite for approximately $1 billion to enhance its thermal management services for AI and high-density computing data centers [10][11]. - SPX Technologies announced a definitive agreement to acquire Crawford United Corporation for about $300 million, aiming to expand its HVAC capabilities [12][14]. Financial Performance - Vertiv Holdings Co. is projected to maintain a revenue growth rate of around 28% for the current year, similar to the previous year's growth [11]. - SPX Technologies reported total revenue of $2.16 billion over the last 12 months, with a solid revenue growth of 12.6% [13].

Core Insights - Investors are encouraged to focus on companies that generate strong returns after all expenses are paid, emphasizing the importance of profitability over loss-making businesses [1] - The global AI market is expected to grow significantly, from $371.71 billion in 2025 to $2,407.02 billion by 2032, indicating a compound annual growth rate (CAGR) of 30.6% [2] - NVIDIA Corporation, Micron Technology, and Vertiv Holdings are highlighted as top AI investment picks due to their high net income ratios [3] Company Analysis - **NVIDIA Corporation (NVDA)**: - Recognized for its computing infrastructure, NVDA has a 12-month net profit margin of 53%, showcasing strong AI-driven profitability [7][9] - **Micron Technology, Inc. (MU)**: - Engaged in memory and storage products, MU has a 12-month net profit margin of 22.9%, supported by higher-than-industry sales and income growth [10][9] - **Vertiv Holdings Co. (VRT)**: - Provides critical digital infrastructure and lifecycle services, with a 12-month net profit margin of 10.7%, benefiting from increased demand for digital infrastructure [11][9] Investment Screening Criteria - The net income ratio is a key indicator of profitability, reflecting the percentage of net income to total sales revenues [4] - Additional screening parameters include: - Zacks Rank of 1 (Strong Buy) indicating a history of outperformance [5] - Trailing 12-month sales and net income growth higher than the industry average [6] - A strong buy percentage rating greater than 70% from current broker recommendations [6] - These criteria have narrowed the stock universe from over 7,685 to only 11 qualifying stocks [6]

Core Insights - Vertiv (VRT) is experiencing significant growth due to the global acceleration of data centers, driven by AI adoption and increasing demand for digital infrastructure [1][2] - The company reported a 43% organic sales growth in the Americas and a 21% year-over-year growth in APAC for Q3 2025 [1] - Vertiv's backlog increased by 12% sequentially and 30% year-over-year to $9.5 billion, supported by a book-to-bill ratio of 1.4 [2][10] Financial Performance - In the trailing 12 months, organic orders grew approximately 21% [2] - The consensus estimate for 2025 earnings is $4.11 per share, reflecting a 44.21% increase from 2024 [13] - Vertiv's shares have gained 61.3% over the past six months, outperforming the broader Zacks Computer & Technology sector, which appreciated 26.6% [8] Product and Acquisition Strategy - Vertiv's extensive product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbar, and modular solutions [3] - The recent $1.0 billion acquisition of PurgeRite enhances Vertiv's capabilities in liquid cooling and thermal management [3][10] - The acquisition combines Vertiv's thermal expertise with PurgeRite's flushing, purging, and filtration capabilities, improving system performance for AI data centers [4] Competitive Landscape - Vertiv faces increasing competition from Super Micro Computer (SMCI) and Hewlett Packard Enterprise (HPE), both expanding their data center capabilities [5][6] - Super Micro Computer is focusing on end-to-end AI rack-scale systems, while HPE is enhancing its offerings with liquid-cooled solutions [6][7] - These competitors are strengthening their positions in the hyperscale and enterprise AI data center market, posing challenges to Vertiv's role [7] Valuation Metrics - Vertiv's stock is trading at a trailing 12-month Price/Book ratio of 19.44X, compared to the sector average of 10.81X [11] - The company currently holds a Zacks Rank 1 (Strong Buy) [13]

Core Insights - Artificial intelligence (AI) remains a significant focus for investors, particularly in the data center sector, with Vertiv (VRT) identified as a top-ranked stock benefiting from this trend [1][6] Company Performance - Vertiv, rated Zacks Rank 1 (Strong Buy), specializes in services for data centers and communication networks, offering power, cooling, and IT infrastructure solutions [2] - Analysts have increased their EPS and sales expectations for Vertiv, with the current Zacks Consensus EPS estimate at $4.11, indicating a 45% year-over-year growth and a 15% increase over the past year [2] - The company reported a strong sales growth of 29% and has built a significant backlog, reflecting robust market demand and a strong competitive position [3][4] Financial Metrics - Vertiv has raised its full-year 2025 sales guidance, indicating a favorable operating environment [3] - The current PEG ratio for Vertiv is 1.2X, below the sector average of 1.4X, and the forward 12-month earnings multiple is 36.1X, significantly lower than the 2025 high of 43.9X [3] Market Context - The demand for Vertiv's products is closely tied to the AI infrastructure build, with strong quarterly results driven by increasing demand [4] - The excitement surrounding AI technology is attributed to its potential to enhance productivity and operational efficiencies for businesses in the long term [6]

Core Viewpoint - The report summarizes significant rating changes from Wall Street that are expected to impact the market, highlighting both upgrades and downgrades across various companies and sectors [1][6]. Upgrades - Synopsys (SNPS): Rosenblatt Securities upgraded the rating from "Neutral" to "Buy," lowering the target price from $605 to $560, anticipating that Q4 results will meet market expectations after a disappointing Q3 [5]. - Eaton Corporation (ETN): Wolfe Research upgraded the rating from "In-Line" to "Outperform," setting a target price of $413, expecting benefits from electrical business orders and easing cyclical factors in 2026 [5]. - Colgate-Palmolive (CL): Royal Bank of Canada upgraded the rating from "Sector Perform" to "Outperform," maintaining a target price of $88, noting that earnings expectations are at a reasonable low despite challenges in 2026 [5]. - RPM International (RPM): Royal Bank of Canada upgraded the rating from "Sector Perform" to "Outperform," raising the target price from $121 to $132, indicating that the stock price has "bottomed out" [5]. - Viking Holdings (VIK): Goldman Sachs upgraded the rating from "Neutral" to "Buy," increasing the target price from $66 to $78, citing the company's unique geographic business layout and high-income customer focus [5]. Downgrades - Warner Bros. Discovery (WBD): Harbor Research downgraded the rating from "Buy" to "Neutral" without providing a target price, following a hostile takeover bid from Paramount [5]. - Norwegian Cruise Line (NCLH): Goldman Sachs downgraded the rating from "Buy" to "Neutral," lowering the target price from $23 to $21, citing an unfavorable risk-reward ratio due to market conditions in the Caribbean [5]. - Confluent (CFLT): Royal Bank of Canada downgraded the rating from "Outperform" to "Sector Perform," raising the target price from $30 to $31, following an acquisition agreement with IBM at $31 per share [5]. - SLM Corporation (SLM): Compass Point downgraded the rating from "Buy" to "Sell," reducing the target price from $35 to $23, after revealing updated mid-term outlooks at an investor forum [5]. - Viavi Solutions (VRT): Wolfe Research downgraded the rating from "Outperform" to "In-Line," citing valuation issues as the stock price has increased 14 times since the last upgrade [5]. Initiations - Micron Technology (MU): HSBC initiated coverage with a "Buy" rating and a target price of $330, identifying the company as a core beneficiary of the storage chip supercycle [9]. - United Airlines (UAL): Montreal Bank Capital Markets initiated coverage with an "Outperform" rating and a target price of $125, noting improvements in the industry environment and recovery in business travel [12]. - Thermo Fisher Scientific (TMO): Goldman Sachs initiated coverage with a "Buy" rating and a target price of $685, expecting the market for life science tools to return to historical growth rates [12]. - Affirm (AFRM): Wolfe Research initiated coverage with a "Sector Perform" rating, setting a fair value range of $72-$82 for the end of 2026 [10]. - Urban Outfitters (URBN): Goldman Sachs initiated coverage with a "Neutral" rating and a target price of $83, acknowledging market positioning but cautioning against high valuation risks [10].

Core Insights - Wolfe Research downgraded Vertiv from "Outperform" to "Peer Perform," indicating a shift in analyst sentiment and reflecting recent market activities [2][6] - Baker Avenue Asset Management LP reduced its stake in Vertiv by 11.4%, while Avion Wealth and DiNuzzo Private Wealth Inc. increased their holdings significantly, showcasing varied investor confidence [3][4][6] - Vertiv's market capitalization is approximately $70.96 billion, with a trading volume of 4,880,797 shares, highlighting ongoing investor interest despite recent fluctuations [5][6] Company Overview - Vertiv Holdings Co. specializes in providing critical digital infrastructure and continuity solutions across various industries, ensuring uninterrupted digital operations [1] - The company competes with major firms in the technology sector, striving to maintain its position in a rapidly evolving market [1] Stock Performance - As of December 9, 2025, Vertiv's stock was priced at $185.61, experiencing a decrease of 1.80%, dropping $3.41, with a trading range between $182 and $188.50 [2] - Over the past year, Vertiv's stock has fluctuated between a high of $202.45 and a low of $53.60, indicating significant market volatility [5]