On Friday, Evercore ISI adjusted its price target for Vertiv Holdings Co. (NYSE:VRT) shares, increasing it to $90 from the previous $80, while keeping an Outperform rating on the stock. The firm's optimism is grounded in recent developments in the industry that are expected to benefit Vertiv in the long term.
The firm highlighted the introduction of Nvidia (NASDAQ:NVDA)'s GB200 NVL72 at the GTC, noting that liquid cooling, which has become standard on the new GPU compute solution, is supplied by Vertiv for the rack scale servers. This advancement is seen as a positive for Vertiv, as it is already involved in providing liquid cooling solutions for these high-density systems.
Moreover, discussions at the DCD Conference emphasized the growing importance of liquid and hybrid cooling as artificial intelligence (AI) technology becomes more prevalent. Industry experts consider liquid cooling a key factor in enabling higher density and more efficient copper usage, particularly in the context of Nvidia's NVL72, which could consume up to 140 kW with additional fiber components.
The firm also mentioned the Microsoft/OpenAI Stargate Project, which, while not officially confirmed, represents a potential $100 billion investment. If realized, it could significantly benefit suppliers of physical infrastructure for data centers, such as Vertiv.
In summary, Evercore ISI believes that these industry developments and data points reinforce a positive outlook for the data center and broader AI infrastructure sectors. The firm's bullish stance on Vertiv is maintained, with the raised price target reflecting an increasingly positive sentiment towards the company's prospects.
InvestingPro Insights
In light of Evercore ISI's recent price target adjustment for Vertiv Holdings Co., a glance at the company's performance metrics and future expectations could provide additional context for investors. According to InvestingPro data, Vertiv boasts a robust market capitalization of $30.82 billion and has demonstrated significant revenue growth over the last twelve months, with a 20.59% increase as of Q1 2023. This growth trajectory aligns with the firm's optimistic outlook for Vertiv, particularly in the expanding AI infrastructure sector.
InvestingPro Tips highlight that Vertiv's net income is expected to grow this year, which could signal continued upward momentum for the company. Additionally, with a high return over the last year and strong returns in recent months, investors have witnessed the stock's capacity for growth. It's worth noting, however, that Vertiv is trading at a high earnings multiple, with a P/E ratio of 67.74, suggesting that the stock is priced with high growth expectations in mind.
For investors seeking a more detailed analysis, InvestingPro offers additional insights, including a fair value estimation which currently stands at $58.3, below the recent closing price of $85.35. This discrepancy may warrant further investigation by those considering an investment in Vertiv. To access a comprehensive list of InvestingPro Tips, which includes 16 additional tips for Vertiv, visit https://www.investing.com/pro/VRT. Remember to use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research with valuable insights.
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