Vertiv Stock Rebounds After Analysts Say AWS News Was Overreaction

Vertiv stock rebounded on Friday after falling on Thursday due to a report that Amazon Web Services developed a liquid-cooling system for its data-center computers. Wall Street analysts said the sell-off was an overreaction, with Deutsche Bank and UBS noting that the solution likely embeds content from scaled suppliers of liquid-cooling systems, most notably Vertiv and nVent. The liquid cooling opportunity for both players remains intact, according to analysts.

Vertiv Holdings' stock rebounded on Friday after experiencing a significant decline on Thursday following a report that Amazon Web Services (AWS) had developed a liquid-cooling system for its data-center computers. The sell-off was largely an overreaction, according to analysts, who noted that the new solution likely incorporates components from Vertiv and other suppliers.

AWS's announcement of its In-Row Heat Exchanger (IRHX) system, designed to cool high-performance AI chips, initially raised concerns about the potential impact on Vertiv's business. However, analysts from Deutsche Bank and UBS [1] stated that the solution is likely to embed content from scaled suppliers of liquid-cooling systems, with Vertiv and nVent being notable examples. They maintained that the liquid cooling opportunity for both players remains intact.

The liquid cooling market is projected to grow from approximately 15% of the thermal market to 30% by 2027 [2], positioning Vertiv as a primary beneficiary of this expansion. Despite the initial market concerns, Vertiv has demonstrated robust performance, with revenue growth of 20.45% in the last twelve months [3].

Analysts from Wolfe Research maintained their Outperform rating and $155 price target on Vertiv, noting that hyperscalers adopting proprietary designs for bespoke server requirements is "not a new development" but "quite routine." They suggested that the AWS announcement could be viewed positively, as it confirms hyperscalers are "going all in on liquid cooling" and retrofitting existing infrastructure to accelerate time to market [3].

Vertiv currently trades at approximately 25 times estimated 2026 earnings. The company has also announced a new reference architecture for cooling and power solutions aimed at supporting the NVIDIA GB300 NVL72 platform, part of its 360AI infrastructure platform [3]. This new design promises significant enhancements in energy efficiency and space utilization.

In other news, Vertiv has appointed Mike Giresi as the new global Chief Information Officer, effective June 30, 2025, to lead initiatives in AI adoption and cybersecurity. The company's Chief Financial Officer, David Fallon, is set to retire, with a transition expected in the latter half of 2025 [3].

References:
[1] https://economictimes.indiatimes.com/news/international/us/aws-just-crushed-vertiv-stock-tanks-over-6-after-amazons-bold-cooling-move-vertiv-stock-news/articleshow/122369788.cms?from=mdr
[2] https://uk.investing.com/news/analyst-ratings/citi-defends-vertiv-and-nvent-stock-amid-liquid-cooling-concerns-93CH-4164784
[3] https://uk.investing.com/news/analyst-ratings/vertiv-stock-falls-on-aws-liquid-cooling-design-news-wolfe-stays-bullish-93CH-4164805