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 - Vertiv (VRT) and Generac Holdings (GNRC) are significant players in the data center infrastructure market, providing essential solutions for data centers and industrial environments [2] - The data center infrastructure management market is projected to grow from approximately $3.06 billion in 2024, with a CAGR of 17.3% from 2025 to 2030, presenting substantial growth opportunities for both companies [3] Vertiv (VRT) Overview - Vertiv specializes in thermal and power management solutions for data centers, which are increasingly demanding due to the complexity of AI hardware and edge computing [4] - The company reported a 24% year-over-year increase in net sales for Q1 2025, reaching $2.036 billion, with organic orders up about 20% compared to the previous year [5] - Strong capital expenditure plans from hyperscalers for data center expansion are favorable for Vertiv, supported by a diverse partner ecosystem including major tech companies [6] Generac Holdings (GNRC) Overview - Generac is expanding its portfolio with new high-capacity generators tailored for the data center market, which is a key growth driver [7] - In April 2025, Generac launched a new range of generators (2.25 MW to 3.25 MW) designed to meet the power needs of data centers, featuring advanced technology for reliable energy solutions [8] - The rise of AI applications is driving demand for energy-intensive data centers, which may strain existing power grids, creating opportunities for Generac [9] Stock Performance and Valuation - Year-to-date, Vertiv's shares have increased by 12.1%, while Generac's shares have decreased by 5.3% due to macroeconomic uncertainties and cost pressures [11] - Vertiv's shares are currently trading at a forward Price/Sales ratio of 4.73X, compared to Generac's 1.90X, indicating a higher valuation for Vertiv [14] Earnings Estimates - The Zacks Consensus Estimate for Vertiv's 2025 earnings is $3.56 per share, reflecting a 24.91% year-over-year increase [17] - Generac's 2025 earnings estimate is $7.42 per share, showing a modest 2.06% year-over-year increase [17] Conclusion - Both Vertiv and Generac are positioned to benefit from the growing data center market, but Vertiv is viewed as the stronger investment option due to its AI-driven growth and strategic partnerships [18] - Generac faces challenges from cost pressures and macroeconomic uncertainties, impacting its market position [19]