VRT Soars on Nvidia's Rocket in the US Data Center Market
Early in 2024, $Vertiv Holdings LLC(VRT)$ hopped on this network. Sure, VRT's shares dipped nearly 10% in the last month, but they've skyrocketed 326% in the past year, even outpacing $NVIDIA Corp(NVDA)$ 's 214%!
As tech giants rapidly deploy AI in their data centers, investors are worried about the energy consumption. But $NVIDIA Corp(NVDA)$ ain't sweating it, thanks to their Nvidia Partner Network (NPN) that tackles all kinds of energy and data center issues.
Vertiv was a humble industrial energy engineering company for a long time, but its stock took off in 2023, all because of its promising prospects in the data center scene.
In March 2024, during Nvidia's annual GPU Tech Conference, they announced that Vertiv joined their partner network, providing power and cooling solutions. Vertiv is now working hand-in-hand to develop Nvidia's next-gen liquid cooling solution powered by the GB200 NVL72 system.
Their high-density power and cooling solutions are designed to support the next-gen GPUs, carrying AI workloads safely and efficiently, ensuring top performance and high availability.
The data center is set to be $Vertiv Holdings LLC(VRT)$ growth engine. Management says their equipment and service order backlog grew 15% to $6.3 billion in the first quarter of 2024.
Vertiv's market cap is over $36 billion now, with a forward P/E ratio of nearly 40 based on expected earnings in 2024. This valuation may not seem outrageous in the AI investment frenzy, but it's already tapped into the growth potential of AI in data centers.
Vertiv expects around 12% organic revenue growth (excluding acquisitions and spinoffs) this year, but even that, along with their 14% operating margin in the past 12 months, isn't enough to justify the current high premium on their stock.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
