Client Newsletter Example: Adding Vertiv Holdings Co. (VRT) - Power and AI Infrastructure a Developing Theme Again - It's Still All About Tech and AI
Published on September 23, 2026 @ 12:59pm
Adding Vertiv Holdings Co. (VRT), a leading provider of power, cooling, and infrastructure solutions for data centers, with strong exposure to the global AI and cloud-computing buildout. Oil drifts lower. Major indexes keep on keeping on. NASDAQ 100 tests its all-time high for the first time since June. S&P 500 still has a ways to go. It's still all about tech for the time being. Here are the details on all of it:
Adding Vertiv Holdings Co. (VRT) - Power and AI Infrastructure a Developing Theme Again - It's Still All About Tech and AI
Oil continues to drift lower, now down around the $90 a barrel level on WTI crude. That's got Treasury yields treading water for the time being, but there definitely hasn't been any water treading for the major indexes, specifically the NASDAQ 100, and all of the higher-quality names associated with the tech and AI trade (yes, almost all of the same semiconductor, memory, and hardware names we've suggested over the last few years).
Provided here are updated weekly charts of the NASDAQ 100 (QQQ) and S&P 500 (SPY). As you can see, QQQ is now testing its all-time high for the first time since June, while the S&P 500 still has some work to do. This is very normal because for those who've continued to follow along, this has been the theme for years.
The NASDAQ 100 and S&P 500 have simply continued to trade punches on their way to new all-time highs. It was the S&P 500 back in August, and now it's the NASDAQ 100. However, over the last five years, the NASDAQ 100 has clearly been the long-term leader, yielding a return of 104% versus an attractive 78% for the S&P 500, and there's certainly reason to believe that longer-term leadership can continue.
I say all of that to say stocks are and will continue to be the place to be. We just have to be willing to stomach the downturns, continue to find exposure to the right ideas, and then ignore the fearmongering media. It was only days ago that the tech trade was moving sharply lower on a narrative that AI could potentially wipe out humanity within ten years. I seriously can't make this stuff up.
There is, however, what we believe to be another newly developing rotation about to take place within the AI trade. Specifically, the broadening of AI infrastructure beyond semiconductors themselves. And even more specifically, power and cooling for data centers.
Two years ago, almost to the day, we suggested Vertiv Holdings Co. (VRT) right here in the newsletter at $69 per share. It ended up finding an all-time high of $380 per share in May of this year before getting the proverbial valuation smackdown. Now, however, despite still having a bit of a lofty valuation, it does finally look both fundamentally and technically attractive again.
As a refresher, Vertiv Holdings Co. (VRT) provides the power management, thermal management, liquid cooling, electrical infrastructure, and integrated systems that keep data centers running. The opportunity has become increasingly powerful as AI computing drives dramatically higher rack densities and power requirements, making Vertiv's technology essential infrastructure for the AI buildout.
The company is also expanding beyond cooling and power equipment into more complete data-center infrastructure solutions, increasing both its addressable market and the amount of each project it can capture.
Alpha Stack Score: 93
Emergence Stack Score: 95
The scores show exceptional confirmation between present business quality and forward acceleration. Vertiv is generating outstanding growth while simultaneously expanding margins, free cash flow, and earnings--exactly the combination that supports both a high Alpha score and an elite Emergence profile.
Second-quarter revenue increased 24% to $3.27B, while adjusted operating margin expanded more than four percentage points to 22.6% and adjusted EPS jumped 60% to $1.52. Management again raised its full-year outlook, while current consensus is looking for roughly $14.0B of 2026 revenue, up about 37%, followed by approximately $18.1B in 2027, another 29% increase. EPS is expected to increase roughly 58% this year and another 34% next year. That earnings growth substantially outpacing revenue demonstrates the powerful operating leverage developing as Vertiv scales.
The longer-term opportunity continues to expand as well. AI factories require enormous amounts of power and increasingly sophisticated liquid-cooling systems, and Vertiv is investing aggressively in additional manufacturing capacity to meet that demand. Recent acquisitions have strengthened its cooling and modular-infrastructure capabilities, while the planned acquisition of Utility Innovation Group would add microgrid controls, switchgear, and power architecture--potentially positioning Vertiv to solve one of AI infrastructure's biggest constraints: getting reliable power to new data centers quickly.
Trading at just under 30 times next year's projected earnings, the underlying growth is unusually strong, but Wall Street is usually willing to pay up for this type of growth, at least once the stock is no longer an overly crowded bullish trade. In other words, now that the stock has come back to earth, the company should continue to grow into what has once again become a far more reasonable valuation level.
Technically, you can see on this weekly chart here that shares of VRT have been under quite a bit of pressure for almost six months now. However, now that they have achieved their 50-week EMA (purple curved line), now is as good a time as any to enter, reenter, or add to the idea.
When we take a step back and assess its monthly chart, there is one caveat--the possibility of a move down to roughly the $207 level, which we would definitely deem to be ultimate support. I'm not necessarily expecting it to get there, but given the volatility of this market, we want to leave ourselves enough room within the buy range to take advantage of it if it does.
Bottom line: Vertiv sits directly in the path of one of the largest infrastructure investment cycles underway today. AI requires more computing, more electricity, more cooling, and increasingly sophisticated power architecture--and Vertiv participates across all four. With a 93 Alpha Stack, and 95 Emergence Stack, accelerating earnings, expanding margins, and an increasingly broad infrastructure platform, VRT remains an exceptional long-term growth story despite the premium valuation.
Therefore, we're going to add VRT to our open buy list today, suggest investors pick it up anywhere between where it is now and that extremely supportive $207 level, and then look for at least a return to its all-time high over the next few years. Even if one only wanted to trade it back to the $314-$320 level, that's fine too.
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John Monroe - Senior Editor and Analyst
