AI Data Center Momentum Remains Strong, Vertiv Says
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PATRICK SEITZ
Data center infrastructure provider Vertiv (VRT) on Wednesday posted better-than-expected first-quarter results and raised its sales outlook for the full year. Vertiv stock jumped on the news.
Wall Street analysts said the Q1 report points to continued momentum for the buildout of data centers for artificial intelligence.
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The Westerville, Ohio-based company earned an adjusted 64 cents a share on sales of $2.04 billion in the March quarter. Analysts polled by FactSet had expected earnings of 61 cents a share on sales of $1.94 billion. On a year-over-year basis, Vertiv earnings rose 49% while sales increased 24%.
Plus, Vertiv raised its full-year sales guidance by $250 million at the midpoint to $9.45 billion.
"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," Chief Executive Giordano Albertazzi said in a news release.
The company's partnership with AI chip leader Nvidia (NVDA) and its reference designs for Nvidia's GB200 and GB300 NVL72 computing platforms "position Vertiv at the forefront of AI factory deployment at industrial scale," he said.
Meanwhile, Vertiv is working to mitigate the impact of tariffs using its diverse manufacturing footprint, Albertazzi said.
Vertiv provides power, cooling and information technology infrastructure solutions for data centers, communication networks and commercial and industrial facilities.
Vertiv Stock Surges After Q1 Report
In morning trades on the stock market today, Vertiv stock soared more than 13% to 81.17.
JPMorgan analyst C. Stephen Tusa Jr. reiterated his overweight, or buy, rating on Vertiv stock and price target of 100.
The company's stronger-than-expected orders and backlog and its 2025 guidance "should be enough to unwind the bear case for now," he said in a client note.
Vertiv's results fly in the face of concerns about data center "demand digestion and hyperscaler pullbacks" from the likes of Amazon (AMZN) and Microsoft (MSFT), he said.
"We now have some numbers to chew on vs. the vacuum and 'Microsoft said, AWS said' played by bears during Q1," Tusa said.
The strength of the AI data center market has been the subject of debate on Wall Street lately.
In a client note on Monday, UBS analyst Karl Keirstead said AI infrastructure spending remains strong but companies are considering ways of cutting back on other cloud-computing costs.
Vertiv stock ranks fifth out of 49 stocks in IBD's Electrical-Power/Equipment industry group, according to IBD Stock Checkup. Vertiv has an IBD Composite Rating of 61 out of 99.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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