If investors hadn’t been paying attention to Vertiv (VRT) before April, they likely are now.
The AI infrastructure company made headlines last month after announcing a partnership with Nvidia and iGenius to deploy Colosseum, one of the world’s largest Nvidia AI supercomputers.
The supercomputer, set to be installed in Italy later this year, will serve as the country’s first sovereign AI data center. It will carry out tasks with sensitive data across financial services, healthcare, and public administration.
As part of the deal, Vertiv will provide infrastructure management services to support the data center.
Following the Colosseum announcement, Vertiv shares jumped 20% following the Colosseum announcement. But the momentum didn’t stop there.
A day later, the company reported a strong first-quarter earnings beat.
Vertiv posted $2.36 billion in Q1 net sales — a 24% increase year-over-year — with organic net sales up 25%.
The growing sales have carried through to the bottom line. Adjusted EPS jumped 49% to $0.64 while operating profit climbed 35% to $337 million.
Based on its strong last quarter performance, Vertiv raised its full-year 2025 net sales guidance by $250 million at the midpoint.
“We continue to see accelerated scaling of AI deployments across the data center market, with strong demand signals reinforcing both our near- and long-term growth outlook,” said CEO Giordano Albertazzi.
He added that the Italy project underscores Vertiv’s ability to “rapidly deploy prefabricated AI solutions at scale.”
Vertiv stock is now up 25.1% over the past month.
A concentrated AI infrastructure play
Morningstar equity analyst Nicholas Lieb called the stock “vastly oversold” earlier this year as investors rotated out of AI names during a pullback in data center spending.
But he now sees it catching up to fair value.
In an April report, Lieb reiterated a $103 price target on VRT. The stock was trading around $95 as of Friday.
Lieb views Vertiv as a pure-play on data center infrastructure, noting that roughly 80% of its revenue comes from that market.
The company holds a leading position in thermal and power management, systems essential to keeping AI and server workloads running without interruption.
“Vertiv has done a great job staying within its niches and filling in the gaps in its thermal and power portfolios through acquisitions,” Lieb wrote.
“Over time, that’s amounted to one of the broadest data center offerings in the world.”
He also sees a long runway for aftermarket services, given the increasing technical complexity of Vertiv’s product lines.
Can the boom go too far?
Not everyone is convinced the data center surge can continue unchecked.
Steve Weiss, CIO of Short Hills Capital Partners, told CNBC in February that he was trimming his exposure to Vertiv not because of weak demand, but because he fears a glut.
“I see so many data center deals each week that the undercurrent — the narrative — is starting to be: are we building too much capacity?” he said.
Weiss also flagged potential risks tied to Vertiv’s China exposure amid President Trump’s sweeping 145% tariffs. The company hasn’t disclosed how much of its supply chain runs through China.
Still, CEO Albertazzi addressed those concerns in the earnings call, saying Vertiv’s “diverse manufacturing footprint, operational flexibility, and commercial strategies” would help soften tariff-related impacts throughout the year.
That said, Weiss didn’t write off the stock. He said Vertiv remains a solid company, just no longer a bargain. “Their valuation has now become reasonable based on their growth.”
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