Why this investor loves Vertiv Holdings

Stan Wong of Scotia Wealth Management told BNN Bloomberg Market Call on March 12 that Vertiv Holdings (VERTIV HOLDINGS Stock Quote, Chart, News, Analysts, Financials NYSE:VRT) is well positioned to benefit from the global buildout of artificial intelligence infrastructure.

Wong said the investment case reflects a shift in the AI theme from companies building the technology to those supplying the infrastructure needed to support it.

“So if you have more and more AI data centres out there, you need stable power, and more importantly, you need cooling systems — and that’s what Vertiv is all about,” Wong said.

He noted that AI data centres operate continuously and require significantly greater power density than traditional computing platforms, making cooling and power management systems mission-critical.

Wong said Vertiv has roughly US$15-billion in backlog, reflecting strong demand from hyperscale cloud providers building AI data centres worldwide.

“It goes back to the whole idea of picks and shovels,” he said. “The picks-and-shovel companies are the ones that are going to benefit.”

Of the analysts covering the stock, 26 rate Vertiv “Buy,” six “Hold,” and one “Sell,” with a consensus price target of US$279.48.

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