Key Takeaways VRT backlog hit $7.9B in Q1, up 25% Y/Y on AI infrastructure demand. VRT sees 2025 organic sales growth of 16.5%-19.5% from AI-driven demand. R&D and capacity investments help VRT scale with complex AI deployments.Vertiv (VRT) is emerging as a key player in the global AI infrastructure buildout, offering advanced power and thermal solutions tailored for high-density compute environments.Rising demand for AI-ready infrastructure fueled Vertiv’s backlog to $7.9 billion in the first quarter of ...

Core Insights - Super Micro Computer's stock has surged nearly 10x over the last three years, driven by demand for server systems linked to generative AI, despite facing an 80% drawdown in 2024 due to regulatory concerns and accounting allegations [2] - The company is projected to grow its revenue by nearly 48% to $22 billion in FY'25 and by 35% to around $30 billion in FY'26, supported by strong expenditure on data center services [3][4] - Super Micro's competitive advantages include customizable and energy-efficient products, with expectations that liquid-cooling systems will be installed in 30% of server racks shipped next year [5] Revenue Growth - Super Micro is expected to achieve significant revenue growth, with projections of $22 billion in FY'25 and $30 billion in FY'26, driven by tech companies enhancing AI capabilities [3] - The company is positioned to benefit from Nvidia's increased production of Blackwell GPUs, which will likely boost demand for its servers [3][4] Competitive Position - Super Micro's products are closely integrated with Nvidia's GPU ecosystem, allowing it to quickly provide compatible server systems [4] - The company is enhancing its production capacity and is expected to see a shift towards higher-end products, particularly in liquid cooling technology [5] Margin Improvement - Adjusted net margins are projected to improve from 6.4% in the first nine months of FY'25 to approximately 12% by FY'28, driven by economies of scale and a favorable product mix [7][8] - The company has effectively addressed technical challenges associated with liquid cooling, which may provide a competitive edge in the AI hardware market [8] Valuation and Earnings Potential - If revenues increase by 2.5x and margins double by FY'27, earnings could rise by about 5x, potentially stabilizing the P/E multiple around 10x [9] - This scenario could lead to Super Micro's stock price exceeding $100 per share in the medium term, contingent on continued revenue growth and margin improvement [9]

Market Overview - The stock market has rebounded significantly after a turbulent period, with the S&P 500 index recovering from a 19% decline and now up 1% year to date [1][2] Trade Relations and Corporate Earnings - Efforts by the Trump administration to negotiate bilateral trade deals have alleviated fears regarding trade wars and economic disruptions [2] - Strong corporate earnings, particularly in the AI sector, have contributed to increased investor optimism [2] Company Highlights Apple - Apple benefits from a temporary suspension of retaliatory tariffs between the U.S. and China, reducing uncertainty for the company [4] - China accounts for nearly 17% of Apple's global sales, and over 80% of iPhones are manufactured there [5] - In the fiscal second quarter, Apple reported a 5% year-over-year revenue increase and an 8% rise in earnings per share (EPS) to $1.65 [6] - Anticipation for the next-generation iOS 19 and iPhone 17, which will feature more AI-optimized capabilities, is expected to drive sales [7] - Shares are currently down about 18.5% from their 52-week high, presenting a potential buy opportunity [7] AppLovin - AppLovin's share prices have surged by 339% over the past year, driven by growth in AI-powered mobile advertising solutions [8] - In the first quarter, advertising revenue increased by 71% year over year, with EPS rising by 149% to $1.67 [9] - The company is expanding into e-commerce and video streaming, leveraging its AI capabilities for targeted advertising [10] - AppLovin trades at a forward price-to-earnings ratio (P/E) of 33, indicating a reasonable valuation given its growth trajectory [11] Super Micro Computer - Super Micro Computer is a key player in AI infrastructure, providing server systems that support Nvidia's AI chips [12] - The company faced challenges in 2024, including a DOJ probe, but an independent committee found no evidence of fraud, allowing it to file its audited annual report [13] - Supermicro excels in liquid cooling technology, which is expected to be adopted by over 30% of new data centers globally by 2025 [14] - Wall Street estimates project a 48% annual revenue growth for 2025, with the stock trading at a forward P/E of 22, indicating strong growth potential [15]