Why Vertiv Stock Soared Today

Shares of Vertiv Holdings(NYSE:VRT) popped on Wednesday after the digital infrastructure supplier's leadership provided bullish commentary on the artificial intelligence (AI) market.

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AI-fueled growth

Vertiv's net sales surged 61% year over year to $4.3 billion in the third quarter. The gains were broad-based. Revenue in the company's Americas, Asia-Pacific, and Europe, the Middle East, and Africa (EMEA) segments climbed 75%, 50%, and 23%, respectively.

Vertiv's power and cooling products are increasingly being used in AI data centers. Although concerns are mounting that rising debt levels and higher interest rates could force construction to slow, Vertiv CEO Giordano Albertazzi has a different view.

"We are in the middle of the largest infrastructure build-out, and it's accelerating," Albertazzi said. "The demands on data center infrastructure are evolving faster than ever, and Vertiv's role in that build-out keeps expanding."

To seize this opportunity, Vertiv is investing aggressively to accelerate product development and boost its production capacity.

All told, Vertiv's adjusted earnings rocketed 78% higher to $2.21 per share. That was well above Wall Street's projections of $1.82.

Additionally, Vertiv's operating and free cash flow jumped 64% and 50%, respectively, to $794 million and $652 million.

Vertiv is well-positioned to profit from future advances in AI

Management now expects full-year adjusted earnings to increase by 70% to $7.15 per share.

"We are in an industry where the more technology changes, the better it is for us," executive chairman Dave Cote said. "We keep investing, we keep building, and what we have built is designed to scale."

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