AI Experts Favor This Data Center Stock in Artificial Intelligence Sector
Vertiv Holdings, a global leader in critical digital infrastructure, is experiencing strong growth and positive analyst ratings in the AI-driven data center market. The company specializes in power, cooling, and information technology management solutions, operating in over 130 countries and headquartered in Ohio.
Robust Earnings and Sales Growth
Vertiv's Q2 2025 results surpassed analyst expectations, with a 42% increase in non-GAAP earnings per share and a 35% surge in revenue. The company's confidence in its market position is reflected in its raised guidance for the remainder of 2025, expecting full-year revenues between $9.925 billion and $10.075 billion, adjusted EPS between $3.75-$3.85, and free cash flow between $1.375 billion and $1.425 billion.
Strategic Investments
Vertiv's strategic investments, such as the acquisition of Great Lakes Data Racks & Cabinets for $200 million and a partnership with Nvidia focused on next-generation AI/data center technology, underscore its focus on innovation and expanding capabilities in AI-driven infrastructure.
Analyst Ratings and Financial Metrics
Analysts view Vertiv as an "incredible growth stock" with expected EPS growth of 32.8% in 2025, significantly surpassing the industry average of 9.6%. Cash flow growth is also strong at 43.9% year-over-year, supporting capacity expansion and innovation investments. Vertiv has a consensus "Strong Buy" rating on Wall Street, but its mean price target of $154 leaves just 11% in upside potential.
Challenges and Outlook
Although Vertiv faces temporary margin pressure from tariffs and supply chain inefficiencies, it has clear plans to resolve these issues by year-end 2025 and continues to accelerate investments to capitalize on the booming AI and data center market.
Market Dynamics
The expanding adoption of AI, cloud software, and high-performance computing is driving a projected annual increase in data center capacity. This trend is expected to continue, providing a favourable outlook for companies like Vertiv that specialize in data center infrastructure.
Financial Metrics
- Vertiv's backlog at the end of Q2 2025 was $8.5 billion, a 21% increase from 2024's end.
- Vertiv's free cash flow for Q2 2025 was $277 million, and end-of-quarter cash, cash equivalents, and marketable securities totaled $1.64 billion.
- Vertiv's adjusted operating profit for Q2 2025 was $489 million, with a non-GAAP operating margin of 18.5%.
- Vertiv's Q2 2025 revenue was $2.64 billion, beating analyst projections by nearly 12%.
- Vertiv's backlog covers at least 78% of expected revenue over the next 12 months.
Stock Performance
Vertiv has delivered standout stock performance in 2025, with a 23% increase. Over the past 12 months, Vertiv stock surged nearly 97%.
Analyst Ratings
Vertiv has been rated by 20 analysts, with 17 providing a "Strong Buy" rating, one "Moderate Buy" rating, and two "Hold" ratings. William Blair estimates that each additional megawatt of deployed data center capacity generates $2.75 million to $3.5 million in Vertiv revenue. Recently, William Blair analysts rated Vertiv "Outperform".
In conclusion, Vertiv is positioned as a growth leader in AI-driven data center infrastructure with strong financial performance, a solid strategic roadmap, and favourable analyst sentiment. The company's focus on innovation, strategic investments, and robust earnings growth make it well-positioned for future success in the AI and data center market.
[1] Source: Vertiv Q2 2025 Earnings Release [2] Source: Vertiv Q2 2025 Conference Call Transcript [3] Source: Yahoo Finance [4] Source: Seeking Alpha
Data-and-cloud-computing technology is at the core of Vertiv's strategic investments, as demonstrated by their acquisition of Great Lakes Data Racks & Cabinets and partnership with Nvidia, both of which aim to enhance their capabilities in next-generation AI/data center technology. Vertiv's financial metrics, such as their strong earnings and sales growth, substantial backlog, and impressive stock performance, demonstrate the positive impact of their focus on AI-driven infrastructure.
