In a report released yesterday, Andrew Obin from Bank of America Securities reiterated a Buy rating on Vertiv Holdings (VRT – Research Report), with a price target of $115.00.
Andrew Obin has given his Buy rating due to a combination of factors including the increasing demand for artificial intelligence (AI) and the anticipated growth in electricity demand by AI servers within data centers. Vertiv Holdings is positioned to capitalize on this trend, as evidenced by their CEO’s estimation that AI servers will account for over 20% of data center electricity needs by 2028. Additionally, robust capital expenditure budgets from cloud service and colocation providers are expected to drive rapid adoption of AI technology. Despite concerns about data center growth constraints, Vertiv’s management has indicated that many developers have the necessary permits and power commitments to proceed at their desired pace.
The pipeline for Vertiv’s AI projects has seen significant growth, which is expected to translate into more orders in the second half of 2024 and the first quarter of 2025. Furthermore, the company’s competitive advantages in liquid cooling—a necessity for the next generation of AI chips—are highlighted by its plans to significantly increase its liquid cooling capacity and its strong partnerships with chip manufacturers like Nvidia. Obin’s raised price objective to $115 reflects a premium multiple over peers, justified by Vertiv’s above-average earnings prospects and strategic positioning within the rapidly evolving AI infrastructure market.
Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VRT in relation to earlier this year.
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Vertiv Holdings (VRT) Company Description:
Vertiv Holdings Co. engages in the design, manufacturing, and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. It also offers power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. It carries out its operations in the following geographical segments: Americas, Asia Pacific, and EMEA. The company was founded on February 7, 2020 and is headquartered in Columbus, OH.
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