Why Vertiv Is 1 of the Best-Kept Secrets of the AI Data Center Boom

Chip and memory stocks have grabbed the headlines, but one of the best-kept secrets in the artificial intelligence (AI) boom are the companies easing the power bottleneck. Vertiv (NYSE: VRT) is a leader in delivering power and cooling solutions for data centers and other markets, and demand for its technology is booming.

There's a looming shortage of electricity to support data center expansion and rising chip density inside these "AI factories." That's why leading cloud companies are investing not only in chips but also in power management systems that squeeze more compute out of every watt. That shift is already helping drive consistent 20%-plus quarterly revenue growth for Vertiv, with more runway ahead.

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Solving the power shortage

Vertiv's trailing-12-month revenue has nearly doubled over the past three years to $11.5 billion. Analysts expect that growth to continue, with consensus estimates pointing to revenue approaching $22 billion by 2028.

The tailwind is simple: Data centers must extract every possible ounce of efficiency from limited power. Bank of America analysts project the U.S. will need more than 230 gigawatts of new generating capacity over the next five years -- more than double what utilities are expected to deliver. That gap helps explain why companies addressing the constraint, including Vertiv, could be among the most underappreciated ways to play the AI boom.

With power becoming scarcer, hyperscalers have to get more out of every megawatt already in their data centers -- a bullish setup for Vertiv. "We see a demand environment that continues to grow, and we continue to invest ahead of it -- planting seeds now that we expect to compound for years to come," Executive Chairman Dave Cote said.

Why Vertiv stock remains a buy

Vertiv's revenue grew 24% year over year in the second quarter, but another underappreciated part of the story is margin upside. Its adjusted operating margin in 2025 was about 20%, and management's full-year 2026 guidance implies 23.8% at the midpoint.

As revenue scales, the company can spread fixed costs across a larger base, supporting margin expansion and faster earnings growth. The stock looks pricey at a forward price-to-earnings ratio of 41, but that valuation is backed by analysts projecting roughly 37% annualized earnings growth over the next several years.

While Vertiv faces competition from larger players like Schneider Electric and Eaton, its advantage lies largely in switching costs. Once a data center installs power systems, replacing them is time-consuming and expensive, effectively locking in the customer.

As AI adoption continues to grow, increasingly complex chip configurations in data centers will require advanced thermal management. This makes Vertiv an excellent stock to profit from the growth in AI infrastructure.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eaton Plc, Schneider Electric, and Vertiv. The Motley Fool has a disclosure policy.