Vertiv, Applied Digital Stocks Surge Amid AI Data Center Boom

Microsoft and Meta Platforms disclosed heightened spending on data centers to support AI plans. This trend is positive for data center infrastructure firms Vertiv and Applied Digital. Vertiv reported quarterly results that beat expectations, with AI data center orders robust and a backlog of $8.5 billion. Applied Digital stock rocketed 34% after reporting quarterly results that beat expectations.

Microsoft (MSFT) and Meta Platforms (META) have recently announced increased spending on data centers to support their artificial intelligence (AI) initiatives, signaling a continued surge in demand for data center infrastructure. This trend is particularly beneficial for firms like Vertiv (VRT) and Applied Digital (APLD), which specialize in providing power, cooling, and other essential services for data centers.

On Wednesday, both Microsoft and Meta disclosed heightened spending on data centers to bolster their AI plans. Jefferies analyst Brent Thill noted that the "big AI buildout is not slowing down" and expects a more than 50% increase in capital expenditures across the industry in 2023 [1]. Collectively, Microsoft, Meta, Amazon (AMZN), Google parent Alphabet (GOOGL), and Oracle (ORCL) are projected to spend an estimated $381 billion in capex in 2025, up 50% from last year [1].

Vertiv and Applied Digital both reported quarterly results that exceeded expectations. Vertiv, which provides power, cooling, and other infrastructure for data centers and industrial facilities, saw robust AI data center orders and a backlog of $8.5 billion. In an interview, Vertiv Chief Executive Giordano Albertazzi stated that their AI data center orders were strong, with the company hitting and surpassing the $3 billion order mark per quarter in the second quarter [1]. Vertiv's stock rose more than 2% to 147.78 in afternoon trades [1].

Applied Digital, which designs, builds, and operates digital infrastructure for high-performance computing and AI applications, also saw its stock rocket 34% after reporting quarterly results that beat expectations [1]. The company's stock price increased to 13.47 in afternoon trading [1].

These developments indicate that the demand for data center infrastructure is growing rapidly, driven by the increasing need for AI capabilities. As the trend of AI-driven data center buildout continues, companies like Vertiv and Applied Digital are well-positioned to benefit from this growth.

References:
[1] https://www.investors.com/news/technology/ai-data-center-buildout-vertiv-applied-digital/