VertivVRT is a stalwart AI investment choice, standing proudly as a picks-and-shovels stock in the realm of artificial intelligence. Teaming up with the reigning AI monarch, Nvidia, Vertiv’s path seems set for growth, regardless of the future dominator of the AI landscape. In a whirlwind of success, Vertiv has seen its stock surge a staggering 700% over the past two years and an impressive 90% year-to-date, yet it trades humbly at a 15% discount from its peaks.
The Powerhouse that is Vertiv: Navigating the AI and Big Data Terrain
Vertiv’s reach extends far and wide, encompassing power, cooling, and IT infrastructure solutions that oversee the operations of data centers, communication networks, and beyond. Acting as the backbone for the computing machinery driving the modern economy, Vertiv ensures a seamless, uninterrupted flow of operations.
Within its arsenal lie critical power, thermal management, racks & enclosures, and monitoring & management solutions, paired with a diverse range of services spanning DC power, electrical reliability, safety, compliance, and more. Vertiv caters to businesses of all sizes, from small enterprises to large corporations across vital sectors like healthcare, retail, telecom, and education.
Hand in hand with Nvidia, Vertiv is at the forefront of tackling future challenges in data center efficiency and cooling, as AI deployment scales up. Organic orders for Vertiv surged by an impressive 57% in the second quarter, with CEO Giordano Albertazzi emphasizing the company’s preparedness to seize the moment and invest in future capacities.
Vertiv’s earnings estimates have painted a rosy picture post its second-quarter results, with a consistent upward trajectory in EPS revisions over the past eighteen months. Garnering a Zacks Rank #1 (Strong Buy), Vertiv has surpassed EPS estimates by an average of 13% over the last four quarters, a testament to its robust performance. Projections indicate a remarkable 46% growth in adjusted EPS for FY24 and another 28% leap in FY25, targeting to reach $3.31 per share next year following a momentous 230% bottom-line growth in 2023. Additionally, Vertiv is set to increase its revenue by 13% in 2024 and 2025, eyeing a nearly $9 billion intake next year.
Vertiv’s Ascendancy: Performance, Technical Standings, and Valuation Insights
Vertiv’s stock has been on a triumphant trajectory, soaring over 800% in the last five years, around 700% in the past two years alone, and an exceptional 90% year-to-date. These meteoric rises position Vertiv firmly alongside tech giants like Nvidia, overshadowing behemoths like Meta in its wake.
Recent movements in the market see Vertiv reclaiming its position above the 21-week moving average, with reinforced support at the 200-day moving average in recent months. Trading comfortably above its 50-day and 21-day moving averages, Vertiv currently resides at a 15% markdown from its peaks recorded in May.
From a valuation perspective, Vertiv trades at a compelling 24% discount to its highs, boasting a forward 12-month earnings multiple of 29.7X. Comparatively, within the Computers – IT Services industry, Vertiv offers a 22% value proposition, demonstrating its financial prudence.
Despite a remarkable surge of 300% over the past three years, vastly eclipsing its industry peers struggling with a 4% decline, Vertiv continues to present itself as a beacon of relative value.
Embracing the Vertiv Journey: A Final Take on this Tech Triumph
The evolving landscape of data centers coupled with the flourishing AI systems, cryptocurrencies, and upcoming technologies paint a prosperous trajectory for Vertiv, paving the way for substantial growth spanning decades. Wall Street’s ardor for Vertiv stock is unmistakable, with all 11 brokerage recommendations from Zacks lined up as “Strong Buys,” cementing its position as a compelling long-term investment.