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Cooling the AI Boom (and Cashing In on the Hottest Trade in Tech)
Noah Zelvis
October 23, 2025
Everyone’s talking chips, but the real money might be in keeping them cool.
This under-the-radar infrastructure giant just delivered another earnings beat — and the story’s only heating up. Read on for all you need to know.
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Vertiv Holdings Co
October 23 – Pre‑market
Ticker: VRT | Sector: Electrical Equipment & Parts/Industrials | Market Cap: ~$63.5B
30‑Second Take
If you've been looking for a way to play the AI infrastructure boom without chasing another chip stock, Vertiv might be your ticket.
The company has quietly become the go-to name for keeping data centres cool, literally.
Its thermal and power management systems are in hot demand as AI workloads strain existing infrastructure.
Shares have already crushed the S&P this year, but with hyperscalers racing to expand capacity (and margins still growing), this setup still looks fresh.
If you’re keeping a close eye on the picks-and-shovels side of AI, Vertiv’s story is hard to ignore right now.
Trade Setup
Timeframe: Medium-term momentum play
Edge Type: Structural growth tailwind
Vertiv’s riding a multi-quarter wave as AI data center spending accelerates globally. The setup leans into durable demand for power and cooling infrastructure.
It’s not a fleeting hype cycle, but rather a structural buildout that could keep pushing this stock higher as capacity expansion ramps into 2026.
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Snapshot Table
Metric | Value | Current Stance |
|---|---|---|
Price | $171.77 | Below average |
52‑week range | $53.60 - $184.50 | Below average |
Short interest | 2.45% | Average |
Next catalyst | New contract wins or partnerships with hyperscalers |
Chart
1-month trading summary: From September 22 to October 22, Vertiv’s stock rose 9.48%, but the post-earnings pullback has cooled some of that momentum.
Management just dropped a strong Q3 with profit up and guidance ratcheting higher, but investors seem to be doing a little “sell the news” dance.
That’s what happens when expectations are sky-high.
At around $164, the stock has moved off its monthly peak near $182, but this is looking more like a pit stop than a problem.
Momentum has cooled, not cracked. If you’ve been watching from the sidelines, this pause might be the reset you were hoping for.
Bull Case
Winning the AI gold rush: If AI is the gold rush, Vertiv’s the one selling the shovels. What’s more, business is booming.
Every major data center operator is racing to expand capacity, and Vertiv’s power and cooling systems are right at the heart of it.
Q3’s results just confirmed what the smart money already suspected: this isn’t a short-term sugar high, it’s a structural wave.
With sales up 29% and order volumes up 60% year-on-year, the future is looking rosy.
Margins are widening, orders are accelerating, and management’s tone is confident without being cocky, a rare combo in this market.
For investors hunting real exposure to AI infrastructure (without paying Nvidia prices), Vertiv still feels like the right kind of ride.
The AI spark pushing growth into 2026 and beyond: The obvious spark here is AI. It’s fair to say Vertiv’s riding that current straight into 2026.
The company just posted another round of blowout earnings, with management upping full-year guidance and signaling even stronger order flow ahead.
Hyperscalers are throwing billions at data center expansion, and every new rack, chip, and server needs to stay cool and powered. This is Vertiv's wheelhouse.
With expansion across Asia and Europe and a healthy backlog that's still growing, you've got multiple quarters of visibility.
The next potential jolt? Q4 results and any hints of margin upside as new capacity comes online.
An expanse of price targets: The analyst price targets span a vast range, from a low of $119 to a high of $216.00.
Fuel left in the technical tank: Vertiv’s chart still tells a bullish story, even with the post-earnings wobble.
The stock’s comfortably trading above its 50-, 100-, and 200-day moving averages, and momentum hasn’t broken stride; it's just cooled off.
The RSI has eased out of overbought territory, giving bulls a cleaner setup for the next leg higher.
Support also looks solid in the $155.00 –$160.00 zone, an area buyers have defended more than once.
In short: the trend’s intact, the pullback’s healthy, and the technicals suggest there’s still fuel left in the tank once the dust from earnings settles.
Bear Case
Key risk: Vertiv’s biggest risk right now isn’t whether AI data centers will keep growing, as it's pretty clear that they will.
The risk is whether expectations have climbed too high, too fast. Even a slight wobble in orders or margins could spark a reality check.
Supply chain costs, power component shortages, or delays in hyperscaler buildouts could all chip away at momentum, too.
And if the broader AI trade cools off, sentiment could turn sharply. In short, Vertiv’s executing beautifully, but there’s not much room for a misstep.
Could deeper-pocketed rivals squeeze dominance? Vertiv’s got plenty of competition on home turf. Eaton (NYSE: ETN) is the big name to watch.
It’s been doubling down on power management for AI data centers and has the scale to muscle into Vertiv's territory quickly.
Generac (NYSE: GNRC) is another interesting rival, expanding beyond generators into energy storage and grid reliability, both crucial for high-demand server farms.
And then there’s Emerson Electric (NYSE: EMR), the company that originally spun off Vertiv, now circling back into automation and industrial energy systems.
Basically, you’ve got a field packed with deep-pocketed players eyeing the same AI-driven infrastructure pie. Vertiv’s edge lies in its focus, but it’s playing in a very crowded league.
Digesting the macro reality checks: The AI buildout story is still roaring, but it’s not immune to macro reality checks.
Rising energy costs, higher interest rates, and tightening capex budgets could all slow the pace of new data center projects.
Add in growing regulatory scrutiny around power consumption and grid strain, especially in Europe, and the expansion curve could flatten faster than bulls expect.
There’s also the risk of cyclical pauses if cloud providers start trimming spend to protect margins.
Bottom line? The tailwinds are powerful, but this sector's not entirely insulated from the headwinds blowing outside the server room.
Crowded trade concern: Vertiv’s no longer a hidden gem. It’s become one of the go-to names for anyone trying to play the AI infrastructure boom without buying semis.
That means a lot of hot money’s already piled in, from momentum traders to institutional funds chasing the same theme.
When everyone’s on the same side of the trade, good news can trigger profit-taking. Just look at the post-earnings dip. The story’s still strong, but it could also be getting crowded at the table.
Quick Checklist
✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (October 22, 2025)
Deep‑Dive Links
That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!
Best Regards,
—Noah Zelvis
Everyday Alpha