Vertiv's AI Infrastructure Growth Outpaces Industry Expectations

Vertiv Holdings Co. (NYSE:VRT) has reported impressive growth due to soaring AI demand for their power and infrastructure solutions. However, the company may not be the favored AI infrastructure play as it falls in line with the rising tide of the industry.

Vertiv Holdings Co. (NYSE:VRT) has reported impressive growth in its second-quarter 2025 results, driven by surging demand for artificial intelligence (AI) infrastructure solutions. The company's net sales increased by 35% year-over-year (YoY), reaching $2.64 billion, fueled by robust organic order growth and a significant order backlog of $8.5 billion [1]. This strong performance underscores Vertiv's ability to capitalize on the growing demand for AI-driven data center infrastructure.

Despite its elevated price-to-earnings (P/E) ratio of 59.2x, which exceeds industry averages, Vertiv's PEG ratio of 1.2 and discounted cash flow (DCF) model suggest that the stock is fairly valued or undervalued by 15.7% [1]. The company's strategic acquisitions and modular solutions, such as Vertiv OneCore, position it to capitalize on the projected 100% growth in edge computing sites by 2025 [1]. Analysts project a 12-month price target of $481.04, reflecting confidence in Vertiv's ability to execute its long-term strategy [1].

However, not all analysts are bullish on Vertiv. An analyst from Rothschild & Co. Redburn initiated coverage with a Neutral rating and a $135 price target, highlighting Vertiv's strong presence in thermal and power management but cautioning that much of this strength may already be priced into the stock [2]. Another analyst from GLJ Research initiated coverage with a Sell rating and a $112 target, implying a 17% downside, citing concerns around competition and the durability of pricing power [2].

Vertiv's recent acquisition of Waylay NV, a generative AI and hyperautomation software company, further underscores its commitment to enhancing its digital infrastructure solutions with AI capabilities [3]. The integration of Waylay's platform is expected to help Vertiv customers improve uptime, optimize energy usage, and enhance operational intelligence.

While Vertiv's strong financial performance and strategic initiatives make it an attractive investment, the elevated P/E ratio and cautious analyst ratings may deter some investors. For those willing to look beyond short-term volatility, Vertiv represents a compelling opportunity in a sector set to redefine global computing infrastructure.

References:
[1] https://www.ainvest.com/news/assessing-vertiv-holdings-valuation-growth-prospects-data-center-infrastructure-sector-2509/
[2] https://finance.yahoo.com/news/valuation-concerns-shadow-vertiv-vrt-041650074.html
[3] https://www.bwdisrupt.com/article/vertiv-acquires-ai-firm-waylay-nv-to-boost-infrastructure-intelligence-569683