Is there More Upside in Vertiv Stock (VRT) After a Stellar Rally?
Vertiv Holdings (VRT) stock has rallied by more than 40% over the past year, as the data center infrastructure company is experiencing solid demand for its products amid the ongoing AI (artificial intelligence) boom. While most analysts are bullish on VRT stock due to AI tailwinds, Wall Street's average price target indicates a possible downside from current levels.
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Favorable Demand Backdrop for AI Infrastructure Companies
Vertiv provides energy-efficient cooling and power solutions that are required to support AI workloads. Interestingly, on Friday, VRT stock rose by 2% after Reuters reported that the Trump administration is preparing a series of executive actions to increase energy supply for AI development in the U.S.
Spending on data centers is expected to increase in the coming years, benefiting AI infrastructure companies such as Vertiv Holdings. Bank of America estimates total data center spending to grow at a compound annual growth rate (CAGR) of 13% from 2024 to 2028, reaching $532 billion by 2028. In fact, infrastructure-related spending is expected to rise even faster, at a CAGR of 16%.
Here's What Bulls and Bears Think About VRT Stock
According to TipRanks' Bulls Say, Bears Say Tool, VRT Bulls are optimistic about the company due to robust demand and better visibility, which are driving higher estimates. Many analysts also believe in Vertiv's ability to address customers' requirements amid the growing complexity in AI deployments, with solid market shares in data center thermal and electrical equipment.
Meanwhile, Bears are concerned about a slowdown in capital spending by hyperscalers or cloud service providers, volatility in orders, and the impact of tariffs on costs.
Is VRT a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on Vertiv Holdings stock based on 12 Buys and two Hold recommendations. The average VRT stock price target of $116.93 indicates a 7.2% downside risk from current levels.
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