Vertiv Holdings (NYSE: VRT) is emerging as a key player in the rapidly expanding AI data center infrastructure, driven by the surging demand for cooling systems. Major tech companies like Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL) are accelerating their data center build-outs to meet massive contractual backlogs, with Microsoft reporting a $677 billion commercial remaining performance obligation (RPO) and Oracle at $664 billion. This growth is fueling the need for advanced cooling solutions, as AI clusters consume significantly more power than traditional data centers.
Vertiv's latest earnings report highlights its strong position in this market. The company's revenue soared 61% year over year to $4.3 billion in the third quarter of 2026, with non-GAAP earnings per share up 78% to $2.21. Organic orders doubled compared to the previous year, prompting Vertiv to raise its 2026 revenue guidance by $650 million to $14.65 billion. The company expects its adjusted earnings per share to jump 70% to $7.15, reflecting the profitability of its AI data center products.
The global data center cooling market is projected to grow from $18 billion last year to $141 billion by 2036. Vertiv is well-positioned to capitalize on this trend, with plans to double its production capacity for chilled water cooling systems by the end of the year. Analysts anticipate sustained earnings growth, and Vertiv's stock is trading at a forward price-to-earnings ratio of 25, which is significantly lower than the Nasdaq Composite's 40. If Vertiv's earnings per share reach $12.50 by the end of 2028 and its valuation multiple increases to 35, the stock could hit $437, implying a 95% upside.
While Vertiv's prospects appear promising, investors should consider that it was not included in The Motley Fool Stock Advisor's latest top 10 list. The Stock Advisor service has historically identified high-growth stocks, such as Netflix and Nvidia, which delivered substantial returns. Vertiv's strong fundamentals and market position make it a compelling investment, but potential buyers should weigh its growth potential against other opportunities in the tech sector.