Vertiv Stock: Betting on Power and Heat In The AI Era

The global race to build massive AI models has been dominated by conversations about high-powered accelerated computing chips and software breakthroughs. But this digital revolution may be running into a surprisingly old-school, analog problem: Power and Heat. As AI “factories” demand exponential increases in electricity, the companies that provide the physical backbone – the cooling systems, the power distribution, and the very plumbing – are becoming unlikely winners.

Image by Jonathan Hammond from Pixabay

One of the clearest beneficiaries of this shift is Vertiv Holdings (VRT), whose stock is up roughly 36% year-to-date as investors increasingly recognize its role as a critical supplier of AI data center infrastructure. AI cannot scale without power density, thermal control, and uptime, and this is where Vertiv operates.

What Exactly Does Vertiv Do?

Simply put, it sells the continuity, power, and thermal management necessary to keep critical data centers operational. When an AI hyperscaler like Google or Microsoft installs racks filled with advanced, high-density GPUs (like those from Nvidia), they face two immediate, challenges:

• The Power Problem: A single AI rack can draw 50 to over 100 kilowatts of power, far more than traditional servers. Vertiv provides the Uninterruptible Power Supplies (UPS) and high-density Power Distribution Units (PDUs) that are required to safely deliver this electricity and prevent outages.
• The Heat Problem: The massive power draw generates extreme heat, making traditional air conditioning ineffective. Vertiv is a leader in liquid cooled solutions, providing the Coolant Distribution Units (CDUs), specialized plumbing, and services needed for Direct Liquid Cooling (DLC) systems that run right up to the chip.

Vertiv’s business is closely tied to the deployment of GPUs, making it a critical, yet one-step-removed, leverage point on the overall demand for AI compute.

Positioned Across the Entire AI Lifecycle

Vertiv is positioned to benefit throughout the entire AI lifecycle.

While training models drives immediate, high-density demand, the long-term shift toward widespread AI inference, which is the daily use of models like ChatGPT, could require a massive, decentralized, and ever-growing global network of data centers. All of these centers, whether for training or inference, require VRT’s power and cooling systems.

The need for efficient, liquid-cooled infrastructure only intensifies as power density increases. This infrastructure-centric model lends VRT a more defensive profile than pure chip stocks, as its revenue is not tied to the success of one specific AI model, but to the industry’s continued need for functioning hardware. Vertiv should stand to monetize AI growth, regardless of which model or chip ultimately sees a stronger uptake.

Financial Momentum And Valuation