The Next Big AI Stock Winners Hiding in Plain Sight

Core Insights - Vertiv is collaborating closely with Nvidia to develop an 800-volt DC power portfolio, positioning itself as a key partner for next-generation AI data centers [1] - The company reported a strong financial performance with $462 million in free cash flow and $1.4 billion in cash and equivalents, supporting its expansion plans [1] - Vertiv's book-to-bill ratio stands at 1.4 times with a backlog of $9.5 billion, indicating a robust revenue forecast for 2026 [2] Financial Performance - Vertiv's organic sales reached $2.6 billion in Q3, reflecting nearly 30% year-over-year growth, with the Americas showing over 40% growth [3] - Adjusted EPS increased by 63% year-over-year to $1.24, and full-year earnings are projected to be $4.10 per share, up around 44% year-over-year [2][6] - Free cash flow is expected to be $1.5 billion for the year, demonstrating strong financial health [6] Market Position and Growth Strategy - Vertiv is expanding its offerings in thermal control, high-density racks, power distribution, and advanced services to strengthen its competitive position as AI workloads grow [2] - The company plans to increase R&D spending by over 20% by 2026 to stay ahead of future GPU generations [2] - Analysts expect earnings growth of 45% in 2025 and 29% in 2026, indicating long-term growth potential beyond short-term AI investments [7] Stock Performance and Analyst Ratings - Vertiv's stock (VRT) has increased by 34% over the past 52 weeks, outperforming the S&P 500 Index's gain of 17% [4] - The stock holds an overall rating of "Strong Buy" from Wall Street, with 18 out of 24 analysts recommending it as a "Strong Buy" [8] - The average target price for VRT is $196.05, suggesting a potential upside of 12% from current levels [8]