Core Insights - Zacks Premium offers tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum [2] - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score emphasizes a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score focuses on trends in stock prices and earnings outlook, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - The VGM Score combines all three Style Scores, serving as a key indicator alongside the Zacks Rank to identify stocks with the best value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +23.9% since 1988, significantly outperforming the S&P 500 [7] - There are over 800 stocks rated 1 or 2, making it essential to use Style Scores to narrow down choices [8] Stock Selection Strategy - Investors should target stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success, while stocks with lower ranks should also have favorable Style Scores to mitigate risks [9][10] Company Spotlight: Vertiv Holdings Co. - Vertiv is a leading provider of critical digital infrastructure and services for various essential industries, including cloud computing and healthcare [11] - Vertiv holds a 1 (Strong Buy) rating on the Zacks Rank, with a VGM Score of B and a Growth Style Score of A, indicating a projected year-over-year earnings growth of 44.6% for the current fiscal year [12]

Core Viewpoint - Vertiv Holdings (VRT) is positioned as a key player benefiting from the AI revolution due to its provision of critical power and cooling infrastructure for hyperscale data centers and AI applications [1] Company Analysis - Vertiv specializes in supplying essential infrastructure that supports the operational needs of large-scale data centers, which are increasingly vital for AI technologies [1] - The company is recognized for its strong financial profile, making it an attractive option for investors looking for solid companies in the tech sector [1] Investment Approach - The analysis employs a quantamental approach, integrating data-driven models with fundamental research to identify investment opportunities [1] - The structured process includes both top-down screening and bottom-up analysis, aiming to provide unique insights accessible to both retail and professional investors [1]

Core Insights - Vertiv Holdings Co (NYSE:VRT) has shown a significant increase in share price, rising by 33% over the past year, indicating strong market performance and investor interest [2] - Analysts have expressed optimism for Vertiv, with Barclays upgrading its rating to Overweight and raising the price target to $200, while TD Cowen has maintained a Buy rating and increased its target to $211, highlighting robust demand for data center infrastructure [2] Group 1 - Jim Cramer has identified Vertiv Holdings Co as a key stock to watch, particularly in light of recent developments in the AI sector, including Softbank's $40 billion investment in OpenAI [2][3] - The demand for data centers is a central theme in the analysis of Vertiv Holdings, with TD Cowen labeling it as their "2026 Best Idea" based on strong channel checks [2] - Cramer suggests that the current market conditions present a buying opportunity for Vertiv, alongside other tech stocks like NVIDIA [3] Group 2 - The positive outlook for Vertiv is supported by its potential to catch up with other AI firms, as noted by Barclays [2] - The financial community is closely monitoring the data center market, which is expected to remain robust, further benefiting companies like Vertiv [2] - The article emphasizes the importance of the recent fundraising activities in the tech sector, which could influence investment strategies for stocks like Vertiv [3]

Investment Themes for 2026 - The primary investment theme for 2026 is "follow the money," focusing on sectors where significant capital will be allocated, particularly in AI infrastructure, aerospace and defense, power solutions, and biotech [2][3]. AI Infrastructure - An estimated $3 to $4 trillion will be spent on AI infrastructure by the end of the decade, covering areas such as data center construction and power solutions [1]. - Comfort Systems (ticker: FIX) is highlighted as a key player in this sector, providing cooling solutions for data centers and warehouses [3]. Aerospace and Defense - Increased military spending globally is expected to benefit defense contractors, with L3Harris identified as a notable company providing missile defense capabilities [1][3]. Power Solutions - Utilities like Duke Energy (ticker: DUK) and NextEra Energy are positioned to benefit from the demand for natural gas and nuclear power solutions [3]. Biotech and Healthcare - The biotech sector is seen as a growth area, especially as large pharmaceutical companies face challenges with drug pricing and patent expirations. Indivior is mentioned as a small-cap biotech company with drugs in the FDA approval pipeline for treating substance abuse disorders [1][3]. Market Dynamics - The influence of the "Mag Seven" tech stocks on the S&P 500 is diminishing, which is viewed positively for market sustainability. Nvidia remains a key player in the AI ecosystem, expanding into autonomous vehicles and robotics [5]. - Concerns exist regarding Tesla's profitability as it transitions from a car company to a robotics company [7]. Volatility and Investment Strategy - Anticipation of increased volatility in 2026 due to various factors, including government funding issues and potential changes in Federal Reserve leadership [8]. - Investors are advised to maintain their risk tolerance and diversify their portfolios, considering defensive sectors like utilities and healthcare during volatile periods [9]. Fixed Income Opportunities - Municipal bonds are highlighted as attractive for high-tax bracket investors due to their tax-free income potential, with expectations for record new issuances in 2026 [10]. Geopolitical Considerations - The situation in Venezuela is noted for its limited short-term impact on the energy market, as the country currently produces less than 1% of global oil output [13]. Valuation Perspectives - Current market valuations are above historical averages, but this does not preclude further market growth. Investors are encouraged to focus on diversified portfolios and growth potential rather than chasing high-priced stocks [14][15].

Core Viewpoint - Vertiv Holdings Co (NYSE:VRT) is gaining attention as a significant player in the AI sector, with Barclays upgrading its stock rating to "Overweight" and increasing the price target to $200, driven by improved earnings outlook and alignment with AI trends [1][4]. Earnings Expectations - The rating change reflects revised earnings expectations for 2026 and 2027, with earnings per share estimates 8% above consensus for 2026 and 12% above for 2027, primarily influenced by revenue assumptions [2]. Revenue Exposure - VRT's revenue is heavily tied to data centers, with 80% of sales coming from this end market. The company's organic sales growth has closely followed U.S. data center physical infrastructure trends, surpassing the multi-industry average in recent years [3]. Analyst Insights - Analysts believe that VRT is positioned for significant gains in 2026, potentially catching up with other Overweight-rated AI companies despite previous underperformance. The stock's recent volatility has created an attractive entry point [4][5]. Competitive Positioning - VRT has underperformed compared to other Overweight-rated AI stocks year-to-date, but its PEG ratio is now at parity with peers, suggesting a potential for performance catch-up in 2026 [5].

Core Viewpoint - Nvidia (NVDA) stock experienced an increase on Tuesday, contrasting with a broader sell-off in many data center infrastructure stocks, as investors consider the 2026 outlook for capital spending on artificial intelligence in light of upcoming tech earnings reports [1] Group 1: Company Performance - Nvidia (NVDA) shares rose on Tuesday, indicating positive investor sentiment amidst a general decline in the sector [1] - Lumentum Holdings (LITE) and Ciena (CIEN) also saw slight increases in their stock prices on the same day [1] Group 2: Market Trends - The overall market for data center infrastructure stocks faced a sell-off, with notable declines in companies such as Arista Networks (ANET), Amphenol (APH), Celestica (CLS), Credo Technology (CRDO), and Vertiv [1] - Investors are focusing on the future capital spending trends related to artificial intelligence, particularly looking ahead to 2026 [1]

CoreWeave, Inc. Overview - CoreWeave, Inc. (NASDAQ:CRWV) has seen its shares increase by 87% since its IPO in March, but has recently faced a decline of 46% since late October [2] - Concerns have arisen regarding delays in data center buildout and the potential for an AI bubble, impacting investor sentiment [2] Analyst Insights - Jim Cramer remains optimistic about CoreWeave, citing its strong relationship with NVIDIA and a solid business model [2] - Citi has resumed coverage on CoreWeave, lowering the price target from $192 to $135 while maintaining a Buy rating [2] - Cramer has highlighted the challenges in the data center sector, particularly the shortage of qualified workers [2][3] Market Sentiment - Cramer described the recent decline in CoreWeave's stock price as "silly," emphasizing the complexities involved in building data centers [3] - There is a belief that while CoreWeave has potential, other AI stocks may offer better returns with lower risk [3]

Group 1 - Tech giant Alphabet has agreed to acquire Intersect, a provider of data center and energy infrastructure solutions, in a deal valued at $4.75 billion [1]

Core Insights - The main challenge in investing in artificial intelligence is not the belief in the technology but identifying which companies will profit from it [2] Group 1: ARTY Overview - iShares Future AI & Tech ETF (ARTY) offers exposure to the entire AI value chain with $1.9 billion in assets and a 0.47% expense ratio [3] - The fund holds 67 companies, with a significant focus on technology at 66.4%, including semiconductors, data center infrastructure, cloud platforms, and AI software [3][4] - Vertiv Holdings is the largest holding at 5.95%, surpassing NVIDIA's 4.3%, indicating the importance of physical infrastructure in AI [3][5] Group 2: Diversification and Holdings - ARTY's diversification is notable, with no single holding exceeding 6%, and the top 10 holdings include major players across various sectors such as chip design, networking equipment, AI platforms, and hyperscalers [4] - The fund's balanced approach captures both infrastructure and software layers of the AI stack, making it a preferable choice over concentrated investments in single companies like NVIDIA [4] Group 3: Performance Metrics - ARTY has delivered a year-to-date return of 28.6% through December 2025, outperforming the S&P 500 by over 12 percentage points [5][7] - The fund's performance also exceeds the Nasdaq-100's return of 20.7%, showcasing its strong alpha generation compared to both the broad market and tech-heavy benchmarks [7]

Core Insights - The global competition in AI development is increasingly reliant on power and cooling infrastructure, positioning companies like Vertiv Holdings as key beneficiaries of this trend [2][3] Company Overview - Vertiv Holdings provides essential continuity, power, and thermal management for data centers, crucial for the operation of AI cloud service providers [5] - The company is linked to the adoption of high-density GPUs, making it a vital player in the AI compute demand landscape [5] Market Position - Vertiv is expected to benefit throughout the entire AI lifecycle, from model training to widespread AI inference, necessitating a vast network of data centers reliant on its power and cooling systems [6] - The demand for efficient, liquid-cooled infrastructure is increasing, giving Vertiv a more defensive profile compared to chip manufacturers [7] Financial Performance - Vertiv's revenues have grown at an average annual rate of 21.4% over the past three years, with a 29% increase in the last twelve months, reaching $9.7 billion [8] - The company has a substantial backlog of approximately $9.5 billion, which has expanded by 30% year-over-year, indicating strong revenue visibility [9] Valuation Metrics - With a market capitalization of around $61 billion, Vertiv is viewed as a critical enabler of AI infrastructure rather than a conventional industrial supplier [10] - The stock is trading at approximately 38x consensus FY'25 earnings and 31x FY'26 earnings, reflecting investor confidence in sustained demand for AI infrastructure [10] Industry Challenges - AI racks consume significantly more power than conventional servers, with consumption ranging from 50 to over 100 kilowatts, necessitating Vertiv's Uninterruptible Power Supplies (UPS) and Power Distribution Units (PDUs) [12] - The high power consumption generates substantial heat, making traditional cooling methods ineffective, which Vertiv addresses through its liquid cooling solutions [12]