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 - IREN Ltd and Cipher Mining Inc. are making significant strides in the AI infrastructure sector with multi-billion-dollar deals that are reshaping the competitive landscape [1] - The demand for AI-driven computing is driving infrastructure providers to partner with major tech companies and cloud leaders [1] IREN's Microsoft Deal - IREN secured a five-year contract worth $9.7 billion with Microsoft to provide access to Nvidia's latest GB300 GPUs for cloud-based AI services [2] - The agreement includes a 20% prepayment from Microsoft and a commitment from IREN to purchase $5.8 billion in Nvidia GPUs and related equipment from Dell Technologies [2] - The infrastructure will be located at IREN's Texas campus, supporting 200 megawatts of AI compute workloads, enhancing IREN's credibility and revenue stream in the AI supply chain [3] Cipher's Partnerships - Cipher Mining signed a 15-year lease worth $5.5 billion with Amazon's AWS to deliver 300 megawatts of AI infrastructure, positioning itself as a leader in repurposing crypto-mining assets for AI data centers [3] - Cipher also entered a $3 billion, 10-year colocation deal with Fluidstack, backed partially by Google, which includes $1.4 billion in guaranteed lease obligations and a 5.4% stake in Cipher [4] - The Texas facility is set to deliver scalable AI workloads through 2036, further solidifying Cipher's position in the market [4] Industry Outlook - Industry experts anticipate more partnerships and billion-dollar deals as hyperscalers compete to secure GPU resources and clean power [5] - Other companies in the AI data center infrastructure space include Applied Digital Corp, Core Scientific, Hut 8 Corp, and HIVE Digital Technologies [5]

Core Insights - Celestica's shares increased by 14.9% for the week, driven by a strong third-quarter earnings report featuring double-digit revenue growth and faster adjusted earnings growth [1][3] Financial Performance - Celestica's revenue grew by 28% year over year in Q3, surpassing analyst expectations, while adjusted earnings per share rose by 52% to $1.58 [3] - The company raised its full-year outlook, projecting revenue of approximately $12.2 billion and adjusted EPS of $5.90 for 2025, with expectations of revenue reaching $16 billion and adjusted EPS of $8.20 for 2026 [4] Market Position and Outlook - The CEO highlighted Celestica's role in the AI infrastructure market, indicating strong demand for its storage, compute, and networking solutions [5] - The 2026 outlook is supported by robust demand from major customers, with potential revenue growth of 31% if guidance is met, and indications of continued demand into 2027 [6] Valuation Considerations - Despite strong performance, Celestica's stock valuation appears stretched, trading at approximately 42 times forward earnings based on the 2026 outlook [7] - The company is exposed to risks associated with the AI infrastructure boom, which could lead to rapid changes in its fortunes [7] Summary - Celestica reported strong results and forecasts impressive growth through 2026, benefiting from increasing demand for AI infrastructure, although its stock valuation is considered high [8]

Core Insights - Vertiv has announced the release of gigawatt-scale reference architectures for NVIDIA's Omniverse DSX Blueprint, aimed at reducing Time to First Token for generative AI at scale [2][6] - The Vertiv OneCore platform integrates compute, power, cooling, and services into a single system, enhancing deployment efficiency and reducing delivery schedules by up to 50% compared to traditional methods [5][6] - The collaboration between Vertiv and NVIDIA is positioned as foundational for the next industrial revolution in AI infrastructure, emphasizing the need for flexible and rapidly deployable solutions [6][7] Deployment Flexibility - Vertiv's reference architectures offer various deployment methods, including traditional stick-built, hybrid, and fully prefabricated solutions, catering to diverse customer needs [4][7] - The prefabricated architecture is built on the pre-validated OneCore platform, optimizing space efficiency and performance for gigawatt-scale deployments [5][8] - The design process is accelerated through the integration of virtual and physical systems, allowing for full-scale digital twin simulations before construction [4][6] Innovations and Features - The reference architectures include optimized power topologies that enhance efficiency and reduce physical footprint, essential for multi-generational AI platforms [7] - Advanced liquid cooling solutions are integrated to manage the thermal demands of accelerated computing, ensuring high performance for current and future compute generations [7] - The comprehensive suite of architectures is supported by a global service organization of over 4,000 field engineers, facilitating rapid deployment and operation of energy-efficient AI factories [8]

Group 1 - Vertiv is highly favored on Wall Street, with 17 out of 24 analysts giving "buy" ratings, indicating strong confidence in the company's prospects [1] - The demand for AI applications is driving significant investment in data centers, which benefits Vertiv's power, cooling, and IT infrastructure solutions [1] - The company has raised its full-year sales guidance from $9.2 billion to $10.2 billion, with adjusted operating profit expectations increasing from $1.935 billion to $2.06 billion, despite tariff cost challenges [3] Group 2 - The stock price of Vertiv has risen 68% this year, highlighting the importance of holding investments through fluctuations rather than selling prematurely [4] - Current valuations show the stock priced at 48 times estimated 2025 free cash flow and 41 times next year's estimates, suggesting a potential need for profit-taking [4] - While Vertiv is positioned well to benefit from the AI/data center spending boom, the recent stock price increase may lead to larger-than-average positions in portfolios, warranting adjustments [5] Group 3 - There are concerns about a potential bubble in the AI/data center sector, making it difficult to predict the market cycle's current phase [2][7] - Investors should be cautious as Vertiv's valuation is contingent on continued growth in its order book and earnings projections [7]

Core Insights - Celestica Inc. reported strong Q3 2025 results with revenue of $3.19 billion and non-GAAP adjusted EPS of $1.58, reflecting growth of 28% and 52% respectively, exceeding guidance [3][8][10] - The company raised its 2025 annual outlook to $12.2 billion in revenue and adjusted EPS of $5.90, up from previous estimates of $11.55 billion and $5.50 [4][9] - For 2026, Celestica anticipates revenue of $16.0 billion and adjusted EPS of $8.20, indicating growth of 31% and 39% respectively, driven by strong demand in AI data center infrastructure [4][18] Q3 2025 Financial Performance - Revenue for Q3 2025 was $3.19 billion, a 28% increase from $2.50 billion in Q3 2024 [8] - Non-GAAP adjusted operating margin reached 7.6%, up from 6.8% in Q3 2024 [8][13] - GAAP earnings per share (EPS) were $2.31, compared to $0.75 for Q3 2024 [8][15] Segment Performance - Connectivity & Cloud Solutions (CCS) segment revenue was $2.41 billion, a 43% increase year-over-year, with a segment margin of 8.3% [13] - Advanced Technology Solutions (ATS) segment revenue decreased by 4% to $0.78 billion, with a segment margin of 5.5% [14] Q4 2025 Guidance - For Q4 2025, Celestica expects revenue between $3.325 billion and $3.575 billion, with adjusted EPS projected between $1.65 and $1.81 [6] - The guidance assumes a non-GAAP adjusted effective tax rate of approximately 20% [6] Annual Outlook - The updated 2025 annual outlook reflects strong Q3 results and anticipated demand for Q4 2025 [10] - The company maintains its adjusted operating margin outlook of 7.4% for 2025 [7] Future Outlook - The demand outlook from major customers remains strong, particularly in AI data center infrastructure, supporting the 2026 annual outlook [4][10] - Celestica plans to file a notice for a new Normal Course Issuer Bid (NCIB) to repurchase up to 5% of its public float [20]

Core Insights - The stock market is experiencing new highs, with cryptocurrency mining and data center infrastructure stocks emerging as significant winners for 2025 [1] - Leading companies include IREN Ltd, Cipher Mining, Applied Digital, and Nebius, with year-to-date gains exceeding 300% [1][2] Company Performance - IREN Ltd has surged over 540% year-to-date, followed by Cipher Mining at 345%, Applied Digital at 338%, and Nebius at 323% [1] - Other notable performers include CoreWeave at 231%, Bitfarms at 209%, and TeraWulf at 142% [2] - Companies like Hut 8, CleanSpark, and Riot Platforms have also advanced over 100%, while Galaxy Digital and Marathon Holdings have seen gains of 69% and 16%, respectively [2] Industry Trends - Traditional Bitcoin miners are transitioning into data infrastructure providers, with IREN repositioning as a renewable-energy-powered data center operator [4] - Applied Digital has secured a $5 billion multi-year AI infrastructure lease and expanded capacity by 150 megawatts, indicating a shift towards stable, recurring data-hosting income [5] - Cipher Mining and Nebius are leveraging existing mining sites to meet the rising demand for AI and high-performance computing (HPC) hosting [6] Market Dynamics - The rally in these stocks is supported by rising Bitcoin prices, increasing institutional interest, and significant global investment in AI infrastructure [7] - Companies that were once solely focused on cryptocurrency are now being re-rated as hybrid plays on both digital assets and the AI boom, reflecting a structural advantage in the digital economy [7]

BREAKING: Trump Hikes Canada Tariff; Huge Earnings, Fed, Xi Ahead Data center infrastructure provider Vertiv (VRT) is on a roll thanks to the buildout of artificial intelligence capacity. Vertiv stock notched a record high on Friday. The Westerville, Ohio-based company delivered a beat-and-raise earnings report on Wednesday. Vertiv's adjusted earnings rose 63% year over year to $1.24 a share in the third quarter. Its sales advanced 29% to $2.68 billion. Vertiv provides power, cooling and other infrastructur ...

Financial Data and Key Metrics Changes - Adjusted diluted EPS for Q3 reached $1.24, up approximately 63% year-over-year, driven by higher adjusted operating profit [8][14] - Q3 organic sales grew 28%, with the Americas up 43% and APAC up 21%, while EMEA declined 4% [8][14] - Adjusted operating profit was $596 million, up 43% year-on-year, with an adjusted operating margin of 22.3% [9][14] - Adjusted free cash flow of $462 million was up 38%, translating to approximately 95% free cash flow conversion [9][16] - The total backlog now stands at $9.5 billion, up about 30% year-on-year and 12% sequentially [10] Business Line Data and Key Metrics Changes - The Americas segment delivered strong organic growth of 43%, driven by accelerated AI demand across product lines [16] - APAC saw 21% organic growth, supported by AI infrastructure demand [16] - EMEA experienced a 4% decline in organic sales, but expectations for recovery are set for the second half of 2026 [17][21] Market Data and Key Metrics Changes - The overall market growth is accelerating, particularly in the colo cloud segment, which is the fastest-growing area [8] - The company reported a trailing 12-month organic orders growth of about 21%, with Q3 orders up 60% year-over-year [8][9] Company Strategy and Development Direction - The company is focused on maintaining technology leadership through R&D investments and operational excellence [4][6] - A restructuring program is being implemented in EMEA to prepare for future growth, with an expected annualized benefit of approximately $20 million starting in 2026 [17] - The company plans to accelerate investments in supply chain and services capabilities to meet evolving customer needs [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a multi-year period of significant growth and value creation, driven by digital transformation and AI demand [6][22] - The company anticipates continued significant organic sales growth in 2026, supported by a substantial backlog and a healthy pipeline [22][24] - Management acknowledged the dynamic nature of tariffs but is optimistic about mitigating their impacts by Q1 2026 [22][23] Other Important Information - The company is committed to maintaining a robust free cash flow, providing strategic flexibility for future investments [23] - The engineering and R&D spending is expected to grow by over 20% in 2026 to stay ahead of industry demands [24] Q&A Session Summary Question: What is driving the order uptake and when will big announcements translate into orders? - Management indicated that strong market conditions, technology evolution, and reliable execution are driving order growth, but the timing of large customer announcements translating into orders can vary [29][31] Question: Can you provide more color on the services opportunity and its margin structure? - Management highlighted that the service business is a unique competitive advantage and is expected to catch up with product growth, generating recurring revenue [37][39] Question: What is the outlook for margins and the impact of tariffs? - Management confirmed that the long-term margin target of 25% by 2029 remains intact, with expectations for incremental margins in the 30%-35% range [46][50] Question: How is the company preparing for growth in EMEA? - Management expressed confidence in a sales acceleration in EMEA and noted that operational inefficiencies are being addressed to improve margins [94][95] Question: What is the competitive environment and how is the company responding to innovations? - Management emphasized the importance of innovation and maintaining a competitive edge through continuous investment in technology [110][111]