Sanmina is growing, but that comes at a cost.Sanmina (SANM 7.42%) investors awoke to disappointment Tuesday, and the industrial stock is down 7.3% through noon ET despite what appears positive news.Deep in the heart of Texas, Sanmina Corporation plans "a major expansion of its Energy business with a new state-of-the-art factory in Houston." Opening in 2027, the new factory will target the U.S. energy market and be "capable of building a broad range of high-quality energy products, including: medium-voltage ...

Core Insights - Sanmina Corporation announced a significant expansion of its Energy business with a new factory in Houston, Texas, aimed at the US energy market, set to produce various high-quality energy products starting in 2027 [1][3] - The company has entered into a partnership with Konar - Electrical Industry Inc. to co-design a custom medium-voltage transformer and explore further collaboration opportunities [2][3] Company Overview - Sanmina is a Fortune 500 company recognized as a leading integrated manufacturing solutions provider in the Electronics Manufacturing Services (EMS) market, serving sectors such as industrial, medical, defense, aerospace, automotive, communications networks, and cloud and AI infrastructure [4] - The company has strategically located facilities worldwide to support its manufacturing solutions [4] Partner Company Overview - Konar is focused on energy transition and decarbonization in the power sector, developing advanced solutions and business models that benefit the community and environment [5] - With over a century of experience, Konar is a regional leader in power engineering and a top manufacturer of rail vehicles [5]

Company Overview - Vertiv Holdings is a global designer and manufacturer of critical digital infrastructure technologies for communication networks and data centers, benefiting from AI and data center demand [1][6] - The company has a diverse product portfolio that includes thermal systems, liquid cooling, switchgear, busbar, and modular solutions, which are essential for power management in high-performance data centers [6] Stock Performance - Vertiv's shares have surged nearly 200% since April, breaking out to an all-time high in 2025 with increasing volume, indicating strong market performance [2][12] - The stock is part of the Zacks Computers – IT Services industry group, which ranks in the top 35% of approximately 250 Zacks Ranked Industries, suggesting potential for outperformance over the next 3 to 6 months [2][3] Earnings Trends - Vertiv has consistently beaten earnings estimates, with a recent EPS of $1.24, surpassing the Zacks Consensus Estimate of $1.00 by 24% and showing a 63% year-over-year growth [9][10] - Analysts have raised Q4 EPS estimates by 3.23% in the past 60 days, with the current consensus at $1.28 per share, reflecting nearly 30% growth year-over-year, and projected revenues of $2.86 billion, up more than 22% [11] Technical Analysis - The stock remains above its upward-sloping 50-day and 200-day moving averages, indicating a strong technical trend, with recent pullbacks presenting buying opportunities [14] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which have been positive for Vertiv, suggesting continued bullish momentum [15] Industry Context - Stocks in the IT Services industry are relatively undervalued based on traditional metrics, with projected earnings growth of 9.64%, compared to the S&P 500's 7.50% [4] - Investing in leading industry groups can enhance stock-picking success, as the top 50% of Zacks Ranked Industries outperform the bottom 50% by a factor of more than 2 to 1 [5]

Core Insights - Marvell Technology is a mid-tier player in the digital infrastructure industry with a market cap of $72 billion and revenue of $5.77 billion in fiscal year 2025 [3] - The company specializes in high-quality custom XPUs, CPUs, and DPUs, essential for AI and cloud-computing data centers, along with Ethernet and data center switches [2][3] - Marvell's recent quarterly results for fiscal 2Q26 showed revenues of $2 billion, a 57.5% year-over-year increase, although it slightly missed forecasts by $10 million [8] Company Overview - Marvell produces network and connectivity solutions that support enterprise mobility and cloud computing, promoting a 'borderless campus' concept [1] - The company provides hardware for connecting 5G radio access networks to the cloud, integrating networking and computing technologies [7] - Marvell's solutions are critical for building the infrastructure necessary for AI advancements [7] Financial Performance - In fiscal 2Q26, Marvell reported a non-GAAP EPS of 67 cents, aligning with forecasts [8] - The company is expected to benefit from positive trends in AI and cloud computing, with analysts expressing confidence in its growth prospects for 2026 [9] Analyst Insights - Analysts from JPMorgan have a bullish outlook on Marvell, citing strong commentary from major clients like Amazon and positive earnings guidance from related sectors [9] - The stock has an Overweight rating with a price target of $120, suggesting a potential 44% upside over the next year [9] - The consensus rating for Marvell is a Moderate Buy, based on 32 reviews, with an average price target of $93.23 indicating a 12% upside from current levels [10]

Core Insights - Vertiv (VRT) shares have increased by 29.4% over the past three months, outperforming the broader Zacks Computer and Technology sector's growth of 15.8% and the Zacks Computers - IT Services industry's rise of 1.5% [1][9] Company Performance - Vertiv's shares have outperformed peers such as Super Micro Computer (SMCI) and Hewlett-Packard Enterprise (HPE), which saw gains of 17.1% and 1.3% respectively in the same period [2] - The company's organic orders grew approximately 21% in the trailing 12 months, with a book-to-bill ratio of 1.4 times for Q3 2025, indicating strong prospects [4] - Vertiv's backlog increased by 12% sequentially and 30% year-over-year to $9.5 billion, driven by the rapid adoption of AI and the growing need for data centers [4] Product Portfolio and Acquisitions - Vertiv's extensive product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbars, and modular solutions, with acquisitions playing a significant role in its expansion [3][7] - The company announced the acquisition of Purge Rite Intermediate for approximately $1.0 billion, enhancing its thermal management and liquid cooling services for AI and high-performance data centers [8] - In August, Vertiv acquired Waylay NV to improve AI-driven monitoring and optimization capabilities for its power and cooling systems [10] Strategic Partnerships - Vertiv's partnership with NVIDIA is a strategic advantage, with the introduction of gigawatt-scale reference architectures aimed at accelerating generative AI deployment by up to 50% [11] - The collaboration with NVIDIA also includes advancements in 800 VDC power architectures for next-generation AI factories [12] Financial Guidance - For Q4 2025, Vertiv expects revenues between $2.81 billion and $2.89 billion, with organic net sales projected to increase by 18% to 22% [13] - For the full year 2025, revenues are anticipated to be between $10.16 billion and $10.24 billion, with organic net sales growth expected between 26% and 28% [14] Earnings Estimates - The Zacks Consensus Estimate for Q4 2025 earnings is $1.28 per share, reflecting a year-over-year increase of 29.29% [15] - The estimate for 2025 revenues is $10.21 billion, indicating a growth of 27.47% year-over-year, with earnings expected to rise by 44.21% from 2024 [16] Valuation - Vertiv is currently trading at a trailing 12-month Price/Book ratio of 19.70X, significantly higher than the broader sector average of 11.89X and its peers [17] Conclusion - Vertiv's strong portfolio and partnerships are driving order growth, justifying its premium valuation, and the company holds a Zacks Rank 1 (Strong Buy) with a Growth Score of A, indicating a strong investment opportunity [19]

Financial Data and Key Metrics Changes - GE Vernova reported a 10% organic revenue growth in Q3, with adjusted EBITDA more than tripling year-over-year to $811 million, and EBITDA margins expanded by 600 basis points [28][30][29] - The total equipment backlog grew to $54 billion, an increase of $11 billion year-to-date, with a services backlog of approximately $81 billion, reflecting a year-over-year increase of over $5 billion [26][29] - Free cash flow generation was approximately $730 million in Q3, with a year-to-date total of nearly $2 billion [32][30] Business Line Data and Key Metrics Changes - The electrification segment saw a revenue increase of over 30% with margins expanding to over 15%, driven by strong demand across multiple regions [27][38] - Power orders grew by 50%, with gas power equipment orders more than doubling year-over-year, leading to a revenue increase of 14% [33][30] - Wind revenue decreased by 9% due to the absence of a settlement from an offshore contract cancellation, but onshore services orders were up 27% year-to-date [35][36] Market Data and Key Metrics Changes - The electrification equipment market in North America is expected to grow at a compounded growth rate of approximately 10%, doubling in size by 2030 [10] - Significant investment in electrification is being driven by increased electricity demand, grid stability needs, and the energy transition [11] - The backlog for Prolec GE was approximately $4 billion at the end of Q2, with expectations for low double-digit revenue growth driven by volume and pricing [13] Company Strategy and Development Direction - The acquisition of Prolec GE for $5.275 billion is aimed at consolidating GE Vernova's position in the grid equipment market, particularly in transformers for North America [5][7] - The company plans to fund the acquisition with a mix of cash and debt while maintaining an investment-grade balance sheet [15] - GE Vernova aims to leverage synergies from the acquisition to enhance operational efficiency and expand product offerings, particularly in low and medium voltage technologies [10][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of the electrification segment, citing strong demand from hyperscalers and data centers [22][19] - The company anticipates continued strength in gas-powered demand and pricing, with expectations to approach 70 gigawatts of contractual gas power commitments by the end of 2025 [20][19] - Management highlighted the importance of maintaining reliability and modernizing aging infrastructure to meet increasing electricity demand [11] Other Important Information - GE Vernova is committed to returning at least one-third of cash generated to shareholders while pursuing targeted M&A opportunities [42] - The company has repurchased over 6 million shares for approximately $2.2 billion year-to-date, reflecting confidence in its stock value [26][32] - The company is investing in AI and automation to enhance productivity and meet growing demand in gas turbine controls engineering [25] Q&A Session Summary Question: Visibility into 2028 targets for Prolec GE acquisition - Management expressed confidence in the 2028 targets due to existing backlog and framework agreements with utilities, which are expected to drive growth [47][49] Question: Mix and capacity for Prolec GE - Management discussed ongoing investments in capacity and the potential for integrated solutions with data centers, emphasizing a focus on medium and low voltage technologies [54][56] Question: Pricing trends for gas turbines - Management acknowledged that while pricing for U.S. gas turbines is currently strong, there is a mix dynamic affecting the overall pricing perception [59][60] Question: Power equipment dollar orders versus gigawatt orders - Management clarified that the positive delta in dollar growth versus gigawatt growth is due to a mix of aero derivatives and heavy-duty gas turbines [63][64] Question: Structural opportunity for margins beyond 2028 - Management indicated that there is no reason to believe margins cannot exceed previous peak levels, citing a larger install base and a more profitable services business [70][72] Question: Cost synergy realization cadence - Management stated that cost synergies are expected to be realized by 2028, with initial savings anticipated to flow relatively soon as teams begin discussions [77]

Core Insights - Honeywell International Inc. has partnered with LS ELECTRIC to develop advanced power and control solutions for data centers and commercial/industrial buildings [1][3][8] Group 1: Partnership Overview - The collaboration aims to simplify power supply and management for critical industries by combining Honeywell's building automation expertise with LS ELECTRIC's power systems proficiency [3][8] - The partnership will focus on creating advanced products such as switchgear and power management systems to ensure uninterrupted operations in data centers [4][8] Group 2: Technological Innovations - Both companies plan to introduce AI-enabled power monitoring systems that will utilize Honeywell Forge and LS ELECTRIC's software capabilities to optimize energy use and detect issues promptly [4][8] - A battery energy storage system (BESS) will be developed to meet growing electricity demand and enhance energy stability in commercial and industrial facilities [5][8] Group 3: Market Positioning - With data centers currently utilizing only 1-2% of global electricity, this partnership positions Honeywell as a comprehensive provider of automation, energy, and power management solutions [6][8] - The integrated offerings are expected to enhance energy efficiency and reliability for Honeywell's customers [6]

Core Insights - Vertiv (VRT) and Hewlett Packard Enterprise (HPE) are significant players in the data center infrastructure market, with Vertiv focusing on thermal and power management systems, while HPE provides integrated data center solutions [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 companies [2] Vertiv's Position - Vertiv has a diverse product portfolio that includes thermal systems, liquid cooling, UPS, switchgear, busbars, and modular solutions, with organic orders increasing by about 11% and a book-to-bill ratio of 1.2 for Q2 2025 [3][10] - The backlog for Vertiv grew 7% sequentially and 21% year-over-year, reaching $8.5 billion [3][10] - The company is enhancing its capabilities through acquisitions, such as the purchase of Waylay NV, which focuses on hyperautomation and generative AI software, aimed at improving AI-driven monitoring and control technologies [5][10] - Vertiv's partnership with NVIDIA is strategic, allowing it to provide efficient power solutions for next-generation AI data centers [6] Hewlett Packard Enterprise's Position - HPE is expanding its offerings with advancements in its HPE Cray and ProLiant servers, which now include liquid-cooled solutions and high-speed interconnects [7] - The company has introduced new features in its HPE Juniper Networking portfolio and AI-native Mist platform, enhancing IT operations and user experiences [8] Stock Performance and Valuation - Year-to-date, Vertiv's shares have increased by 39.8%, while HPE's shares have appreciated by 16.7%, with Vertiv's performance attributed to its robust product portfolio and partnerships [11] - Vertiv shares are currently considered overvalued with a Value Score of D, while HPE shares are viewed as undervalued with a Value Score of B [14] - The trailing 12-month Price/Book ratio for Vertiv is 19.41X, significantly higher than HPE's 1.34X [14] Earnings Estimates - The Zacks Consensus Estimate for Vertiv's 2025 earnings is $3.83 per share, reflecting a year-over-year increase of 34.39% [16] - In contrast, HPE's 2025 earnings estimate is $1.90 per share, indicating a year-over-year decline of 4.52% [16] - Vertiv has consistently beaten earnings estimates, with an average surprise of 10.65%, compared to HPE's average surprise of 4.39% [17] Conclusion - Both companies 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][20]

Core Insights - Vertiv (VRT) shares have increased by 10.6% year to date, underperforming the broader Zacks Computer and Technology sector's growth of 14.1% due to a challenging macroeconomic environment [1] - The company has outperformed the Zacks Computers - IT Services industry, which has seen a decline of 15.3% during the same period [2] Stock Performance - Vertiv's backlog grew by 21% year over year to $8.5 billion, with a book-to-bill ratio of 1.2 for Q2 2025, indicating strong demand [5][10] - The revenue outlook for 2025 has been raised to between $9.93 billion and $10.08 billion, with organic growth projected at 23% to 25% [10][13] Product and Service Expansion - Vertiv launched Vertiv OneCore, a scalable prefabricated data center solution that integrates power, thermal, and IT infrastructure [7] - The company acquired Waylay NV to enhance its AI-driven monitoring and control capabilities for data centers [8] Partnerships and Collaborations - Vertiv's extensive partner base, including companies like NVIDIA and Intel, has been a significant growth driver [9] - Collaboration with Tecogen provides advanced natural gas-powered chiller technology, addressing power constraints for AI deployments [12] Earnings Estimates and Valuation - The Zacks Consensus Estimate for Q3 2025 earnings is 99 cents per share, reflecting a year-over-year increase of 30.26% [15] - Vertiv is currently trading at a trailing 12-month Price/Book ratio of 15.36X, indicating it is overvalued compared to the broader sector [17] Conclusion - Vertiv's strong portfolio and partner base are driving order growth, justifying its premium valuation [21]

Core Insights - Vertiv (VRT) is experiencing strong organic order growth, with a 15% year-over-year increase and 11% sequential growth in Q2 2025, surpassing $3 billion in orders for the first time [1][10] - The company's backlog reached $8.5 billion, reflecting a 21% year-over-year increase and a 7% sequential increase, supported by a book-to-bill ratio of 1.2x [2][10] - Regional performance is a significant growth driver, with the Americas showing mid-40% growth, APAC with mid-30% growth, and EMEA delivering high single-digit growth [2][10] Company Performance - The trailing 12-month organic orders growth is at 11%, indicating sustained momentum [2] - Vertiv's collaborations with industry leaders like CoreWeave and Oklo demonstrate its commitment to innovation in data center infrastructure [3] - Recent acquisition of Waylay NV enhances Vertiv's AI-driven monitoring and control capabilities for data centers [4] Competitive Landscape - Vertiv faces stiff competition from ABB and Eaton, both expanding their capabilities in the data center infrastructure market [5] - ABB reported double-digit order growth in Q2 2025, driven by demand across multiple regions [6] - Eaton's data center orders surged approximately 55% year-over-year, with a 50% increase in sales in Q2 2025 compared to the previous year [7] Stock Performance and Valuation - Vertiv's shares have gained 18.2% year-to-date, outperforming the broader Zacks Computer & Technology sector, which appreciated 13.4% [8] - The stock is trading at a premium with a trailing 12-month Price/Book ratio of 16.40X compared to the sector's 10.21X [11] - The consensus estimate for 2025 earnings is $3.82 per share, reflecting a 34.04% increase from 2024 [13]