While AI-related concerns occasionally weigh on markets, the AI trade remains the primary driver of the indices. Vertiv Holdings Co. (VRT) is a way to play it. Vertiv does not manufacture chips or servers, but its equipment supplies the electricity and cooling needed to operate them, notes Doug Gerlach, editor of SmallCap Informer.
Company investment behind AI remains full-go, with top hyperscalers projecting more than $1 trillion in capital expenditures in 2027 alone, up about one-third over 2026. For comparison, the aggregate capital expenditures for these companies in 2022 was approximately $150 billion.
Vertiv Holdings Co. (VRT)
Source: TradingView
Headquartered in Westerville, Ohio, Vertiv operates in more than 130 countries and has become a major supplier to the growing AI data center market. As computing demands increase, its systems are becoming more important to data center performance, reliability, and cost.
At its May investor conference, Vertiv management discussed AI racks operating at approximately 140 kilowatts, with future designs moving toward 300 kilowatts and beyond. At these densities, air cooling becomes less practical, increasing demand for liquid cooling systems that remove heat directly from processors. Vertiv supplies the coolant distribution units, chillers, and related equipment needed for these systems.
Assuming annual earnings per share growth of 30%, earnings could reach $17.19 per share in five years. At a P/E of 40, that would produce a potential share price of $688.
On the downside, applying a P/E multiple of 25 to trailing-twelve-month earnings of $4.63 results in a share price of $116. These estimates produce an upside/downside ratio of 3.7 to 1.
