Artificial intelligence (AI) stocks are once again experiencing a remarkable year, as investment in this sector continues to surge without any indication of slowing. This is to be expected, given the widespread interest in harnessing the productivity and efficiency improvements that AI can offer.
It's no wonder that leading AI companies like Nvidia and Palantir Technologies have seen their shares perform exceptionally well in recent months. Nvidia’s share price has soared 62% over the last half-year, fueled by strong demand for its AI chips that support model training and inference in data centers. At the same time, Palantir’s stock has doubled during the same period, thanks to rapid growth driven by increasing interest in its generative AI software platform.
Yet, the impressive gains of these giants have been eclipsed by a much smaller competitor, Vertiv Holdings ( VRT -1.55%), which has surged an astonishing 152% in just six months. Let’s explore what has propelled Vertiv’s stock far ahead of Nvidia and Palantir recently, and whether it remains a compelling investment.
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Vertiv’s rapidly expanding order pipeline signals a promising outlook
Vertiv specializes in the design, production, and sale of power and thermal management systems, data center racks and enclosures, as well as related software and services that ensure the reliable operation of data centers and communication networks. The company’s solutions are seeing heightened demand due to the complex and power-intensive workloads associated with high-performance computing and AI in data centers.
For example, CoreWeave, a rapidly expanding cloud infrastructure company, has teamed up with Vertiv to launch dedicated AI data centers. CoreWeave recently integrated Vertiv’s cooling distribution units into its Nvidia GB300 NVL72 rack-scale system, and Vertiv will also supply modeling and thermal simulation services to maintain operational stability.
Collaborations with companies like CoreWeave are a key reason behind Vertiv’s accelerating growth.
Data by YCharts.
During the first half of 2025, Vertiv’s revenue climbed 30% year over year to $4.67 billion. This indicates that the company is on pace for much stronger growth this year, following a 16% revenue increase in 2024 that brought annual sales to just above $8 billion. Vertiv is specifically forecasting organic sales growth of 24% for 2025.
It’s also notable that Vertiv recently acquired Great Lakes, a provider of data racks and cabinets, for $200 million, strengthening its foothold in the AI data center sector. This strategic purchase comes at a time when Vertiv’s incoming orders are outpacing its ability to deliver.
This is reflected in the company’s book-to-bill ratio of 1.2 for the second quarter. Vertiv secured over $3 billion in orders during Q2, prompting an upward revision of its full-year guidance. Additionally, Vertiv’s non-GAAP earnings grew 42% year over year in Q2, despite facing challenges from tariffs.
The encouraging news is that Vertiv appears well-positioned to maintain these robust growth rates for the foreseeable future. According to Goldman Sachs, power consumption in data centers driven by AI is projected to rise by an extraordinary 165% by 2030. This surge will be fueled by expanding capacity to accommodate AI workloads.
McKinsey estimates that data center capacity could quadruple from 2023 to 2030, reaching 219 gigawatts (GW) in a moderate scenario. Even then, there may still be a shortfall in capacity to satisfy AI-driven demand by the decade’s end. As more AI-focused data centers are built, demand for Vertiv’s cooling, power management, and rack solutions should continue to grow.
These trends are likely to support sustained, strong earnings growth for Vertiv over the long term—a view echoed by industry analysts.
Data by YCharts.
The stock remains attractively priced
Although Vertiv shares have skyrocketed over the past six months, the stock is still trading at 34 times forward earnings. This is below the average price-to-earnings ratio of 52 for the U.S. tech sector. Given the company’s rapid earnings growth, purchasing Vertiv at this valuation appears to be a prudent choice.
Furthermore, based on projected annual earnings growth over the next five years, Vertiv’s price/earnings-to-growth (PEG) ratio stands at 0.91, according to Yahoo! Finance. The PEG ratio is a forward-looking valuation measure, and a value below 1 suggests the stock is undervalued relative to its growth prospects.
For these reasons, investing in this AI stock could be wise even after its recent impressive rally, as it still has room to climb higher.
