Core Insights - Vertiv Holdings (VRT) and TE Connectivity (TEL) are significant players in the AI infrastructure sector, providing essential components for data centers [1] - AI infrastructure spending is projected to exceed $200 billion by 2028, presenting substantial investment opportunities for both companies [2] Vertiv Holdings (VRT) - Vertiv's product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbar, and modular solutions, with organic orders growing approximately 20% in the last 12 months [3] - The company reported a book-to-bill ratio of 1.4 for Q1 2025, indicating strong demand, and a backlog growth of 10% sequentially and 25% year over year, reaching $7.9 billion [3] - Vertiv introduced the CoolLoop Trim Cooler, which offers up to 70% energy savings and 40% space reduction, enhancing cooling solutions for AI applications [4] - The company launched four new systems aimed at improving power efficiency and thermal management in AI-driven data centers [5] - Vertiv's partnerships with companies like NVIDIA and Intel are crucial for its growth [6] TE Connectivity (TEL) - TEL is experiencing growth due to increasing demand for connectivity solutions in AI, automotive electrification, and industrial automation, with orders reaching $4.25 billion, a 6% increase year over year [7] - The company anticipates revenue growth exceeding $700 million in fiscal 2025, driven by strong momentum in AI applications [8] - TEL's digital data networks business saw nearly 80% organic growth in Q2 2025, fueled by demand from hyperscale AI platforms [9] Price Performance and Valuation - Year to date, Vertiv's shares have decreased by 7.1%, while TE Connectivity's shares have increased by 13.6% [10] - Vertiv shares are currently overvalued with a Value Score of D, trading at a forward Price/Sales ratio of 4.02X, compared to TEL's 2.80X and a Value Score of B [14] - Earnings estimates for Vertiv in 2025 are $3.55 per share, reflecting a 24.56% year-over-year increase, while TEL's estimates are $8.19 per share, indicating an 8.33% increase year over year [16] Conclusion - TE Connectivity is positioned as the stronger investment option due to robust growth in AI applications, solid earnings estimates, and attractive valuation compared to Vertiv [17]

Core Viewpoint - Vertiv (VRT) shares have declined 19% year to date, underperforming the broader Zacks Computer and Technology sector and the Zacks Computers - IT Services industry, primarily due to macroeconomic challenges and trade war fears stemming from U.S. tariffs [1][2]. Company Performance - VRT stock has underperformed compared to Eaton (ETN), which has invested over $8 billion in sustainable energy solutions, with Eaton's shares down 11.3% year to date [2]. - Vertiv's organic orders grew approximately 20% in the trailing 12 months, with a book-to-bill ratio of 1.4 for Q1 2025, indicating strong prospects [5]. - The backlog increased by 10% sequentially and 25% year over year, reaching $7.9 billion [5]. Product Portfolio Expansion - Vertiv launched four new systems in March 2025 aimed at AI applications, including Vertiv Unify software and SmartRun modular solutions, enhancing power efficiency and scalability [6]. - The introduction of the Vertiv CoolLoop Trim Cooler offers up to 70% energy savings and 40% space reduction for high-density cooling environments [7]. Strategic Partnerships - Vertiv's partnerships with companies like Tecogen, NVIDIA, and others are key growth drivers [8][9][10]. - The collaboration with Tecogen focuses on advanced natural gas-powered chiller technology for data centers, enhancing cooling solutions [9]. - The partnership with NVIDIA aims to launch a modular AI supercomputer in Italy by 2025 [10]. Financial Guidance - For 2025, Vertiv expects revenues between $9.325 billion and $9.575 billion, with organic net sales growth projected at 16.5% to 19.5% [11]. - The second-quarter 2025 revenue forecast is between $2.325 billion and $2.375 billion, with organic net sales growth expected in the 19% to 23% range [12]. Earnings Estimates - The Zacks Consensus Estimate for second-quarter 2025 revenues is $2.27 billion, indicating a year-over-year growth of 16.48% [13]. - The 2025 earnings estimate is pegged at $3.55 per share, reflecting a 24.56% increase from 2024 [14]. Valuation Metrics - Vertiv is currently trading at a trailing 12-month Price/Book ratio of 12.19X, compared to the sector's 8.90X, indicating it is overvalued [15]. - The company has a Zacks Rank 3 (Hold), suggesting investors should wait for a more favorable entry point [19].