Vertiv(US:VRT)2025-09-30 02:22Summary of Delta Electronics vs. Vertiv – Data Center Power and Cooling Face-Off Industry Overview - The report focuses on the data center power and cooling solutions industry, specifically comparing Delta Electronics (2308.TW) and Vertiv (VRT.N) as leading providers for AI data centers - The total addressable market (TAM) for power and cooling solutions is projected to grow at a 30% compound annual growth rate (CAGR) to reach US$1,729 billion from 2026 to 2030e [1][16][87] Key Insights on Delta Electronics - Delta Electronics is recognized as a leader in power and liquid cooling systems for AI server racks, holding over 50% of the global supply share [10] - The price target for Delta has been raised to NT$1,111, reflecting confidence in its comprehensive solutions portfolio and continuous margin expansion [10] - Delta's revenue is expected to grow at a 40% CAGR from 2024 to 2027e, driven by its focus on margin-accretive business and expansion of production facilities [10][54] - The company aims for a long-term revenue CAGR of at least 10%, with data center exposure projected to account for 40% of total revenue by 2025 [53] Key Insights on Vertiv - Vertiv has a strong focus on data center power, cooling, and IT infrastructure, with 80% of its revenue derived from this sector [11] - The company is expected to achieve a 30% profit CAGR from 2024 to 2027e, supported by its comprehensive service offerings and strong relationships with key industry players [11] - Vertiv's service revenue contributes approximately 23% to its total revenue, enhancing its competitive positioning [103] Market Dynamics - The convergence of white space (IT equipment area) and gray space (supporting infrastructure) is becoming increasingly important as power and cooling demands rise [6][8] - AI-related infrastructure upgrades are expected to drive significant growth in both white space and gray space power and cooling solutions, with white space power and cooling TAM projected to grow at a >40% CAGR through 2030 [30][87] - The transition to 800V high-voltage direct current (HVDC) power systems and liquid-to-liquid cooling solutions is anticipated to enhance the value of offerings from both companies [37][100] Competitive Landscape - Both Delta and Vertiv are positioned to benefit from the growing demand for data center infrastructure, with the report suggesting that this is not a zero-sum game; both companies can thrive [9][16] - Delta's diversified exposure across various markets (40% data center, 29% commercial & industrial, etc.) contrasts with Vertiv's concentrated focus on data centers [42] - Delta's market cap is significantly larger than Vertiv's, providing it with more stability and liquidity [80] Financial Metrics Comparison - Delta Electronics: - 2025e Revenue: US$16,341 million - 2025e Operating Margin: 14% - 2025e Net Profit: US$1,709 million - 2026e P/E: 30x [18] - Vertiv: - 2025e Revenue: US$10,024 million - 2025e Operating Margin: 20% - 2025e Net Profit: US$2,003 million - 2026e P/E: 27x [18] Conclusion - The data center power and cooling solutions market is poised for significant growth, driven by AI demand and infrastructure upgrades - Delta Electronics and Vertiv are well-positioned to capitalize on these trends, with distinct competitive advantages and growth strategies - Investors should consider the evolving landscape and the potential for both companies to achieve substantial revenue and profit growth in the coming years [16][100]