Vertiv Stock: Buy, Sell, or Hold?

Core Viewpoint - Vertiv (NYSE: VRT) is positioned as a key player in the AI data center infrastructure market, experiencing significant stock growth following strong earnings results, making it a potential investment opportunity [1]. Group 1: Investment Opportunities - Vertiv is well-positioned to capitalize on the long-term trend in data center construction driven by increased AI usage, as hyperscalers expand their capacity to meet rising demand [2]. - The company is collaborating with Nvidia to develop 800V DC power architectures, aligning with Nvidia's upcoming Rubin Ultra platforms, which enhances its role in the AI ecosystem [3]. - Vertiv has launched the Vertiv OneCore prefabricated modular data centers, which integrate various components into a unified system, allowing for faster deployment to meet market demands [4]. - The company reported a 252% year-over-year growth in organic orders in the fourth quarter, leading to a backlog of $15 billion, more than double from the previous year, indicating strong demand for its products [5]. - Vertiv's book-to-bill ratio stands at 2.9, suggesting that demand significantly exceeds current revenue recognition [5]. Group 2: Investment Risks - Despite the growth potential, there are risks related to high valuation expectations and potential technological shifts that could impact current hardware needs [6]. - The stock is considered expensive, trading at 72.3 times its trailing-12-month earnings per share, which raises concerns about its valuation [7]. - Analysts project a 44% increase in non-GAAP earnings per share to $5.99 in 2026, followed by a 33% increase to $8.01 in 2027, indicating strong growth expectations but also highlighting the high valuation risk [7].