SMCI vs. VRT: Which Liquid Cooling Provider is a Better Pick Now?

Core Insights - Super Micro Computer (SMCI) and Vertiv Holdings (VRT) are key players in the data center liquid-cooling market, driven by the demand for AI and high-performance computing solutions [1][8] - The data center cooling market is projected to grow at a CAGR of 11.8% from 2025 to 2032, indicating strong industry potential [2] SMCI Overview - SMCI's next-generation air-cooled and liquid-cooled GPU and AI platforms contributed over 70% to its revenue in Q4 of fiscal 2025 [3] - The company has achieved a production volume of over 2000 direct liquid cooling (DLC) racks per month, reflecting strong demand for its products [3] - SMCI launched DLC-2 technology in May 2025, which offers significant benefits such as up to 40% reduction in electricity costs [4] - However, SMCI faces challenges including delayed purchasing decisions from customers and margin contraction due to price competition from rivals like HPE and Dell [5] VRT Overview - Vertiv has a robust thermal management portfolio, including Coolant Distribution Units and immersion cooling systems, which are essential for optimizing performance in AI and HPC workloads [7] - The acquisition of CoolTera in 2023 enhances Vertiv's capabilities in advanced cooling technology [7] - Vertiv's revenue for fiscal 2025 is estimated at $9.98 billion, reflecting a year-over-year growth of 24.6%, with earnings projected at $3.84 per share, indicating a growth of 34.74% [10] Stock Performance and Valuation - Year-to-date, SMCI shares have increased by 79.7%, while VRT shares have risen by 57.6% [12] - SMCI is trading at a forward Price to Sales ratio of 1.00X, above its median of 0.82X, while VRT is at 6.09X, higher than its median of 4.68X [13] Conclusion - Both SMCI and VRT are benefiting from the growth in cooling technology driven by AI workloads, but VRT's stronger financial performance positions it as the more favorable investment option [16]