Vertiv Is Set to Benefit as AI Moves From Hype to the Real Economy

Vertiv (NYSE: VRT) is getting renewed investor attention as artificial intelligence spending shifts from hype to real-world build-outs. That's because every new data center uses huge amounts of electricity and produces huge amounts of heat.

Without reliable power supplies, robust backup systems, and advanced cooling, the world's most powerful AI chips are basically expensive paperweights. Vertiv sells power and cooling gear that data centers can't run without. That helps explain the 1,070% surge in Vertiv's stock over the past five years as investors chased the infrastructure side of the AI story.

The question for investors today, though, is whether the fundamentals can support more upside from here.

Image source: Getty Images.

The data center boom is already showing up in Vertiv's numbers

In the first quarter of 2026, Vertiv's revenue increased 30% year over year to $2.65 billion. Adjusted diluted earnings per share (EPS) jumped 83% to $1.17.

Management also raised its 2026 guidance, projecting revenue of $13.5 billion to $14 billion for the year, and adjusted EPS of $6.30 to $6.40.

Step back a bit further, and the trend is hard to miss. Over the last three years, Vertiv's revenue and net income have improved significantly. Together, it suggests Vertiv's push into AI-related data center demand is already translating into results. That's impressive for a company that has only been public for six years.

So what could keep the momentum going?

Artificial intelligence could reach $2 trillion by 2034

Vertiv's biggest catalyst is its position serving the AI build-out. There are forecasts that the artificial intelligence industry will grow to a value of $2 trillion by 2034. It's hard to imagine that happening without a lot more data centers.

That's where the spending wave comes in. The four major hyperscalers -- Microsoft, Meta Platforms, Amazon, and Alphabet -- have all been vocal about their plans to increase capital expenditures tied to AI and infrastructure. Some portion of that money will inevitably flow into the less-glamorous parts of the stack, like power, cooling, and the hardware needed to keep data centers running reliably.

Vertiv hasn't publicly disclosed major contracts with AWS, Microsoft, Google, or Meta. Still, it has announced an engineering partnership with Nvidia to develop power and liquid-cooling architectures that hyperscalers may use when deploying next-generation AI systems. That kind of partnership can provide a company with enhanced credibility and help open doors to additional deals over time.

Its P/E of 80 could be a cause for concern

The catch is that Vertiv's stock has moved much faster than most "normal" valuation models would expect.

Shares are up about 150% over the last 52 weeks and more than 3,000% since it went public in 2020 via a reverse merger with a special purpose acquisition company (SPAC). The stock also trades at roughly 80 times earnings. At today's price, investors are paying about $80 for every $1 of profit the company generates.

On a traditional basis, that's a steep premium. It's also not unique in the AI trade, where investors are often willing to pay up now for growth they expect to show up later.

Even so, Vertiv's valuation stands out compared with some of the biggest names in tech. Nvidia trades around 32 times earnings, Meta around 24, Microsoft around 23, and Amazon and Alphabet are both below 30.

Does that mean investors should avoid Vertiv simply because the price-to-earnings ratio is high? Not necessarily. Such a premium could be justified if growth remains strong and demand for data center infrastructure continues to accelerate. If AI spending is still in its early innings and hyperscalers continue to build out capacity, Vertiv's business could grow enough to match today's optimistic valuation.

Is Vertiv a buy?

For long-term investors with a higher tolerance for volatility, Vertiv could be a compelling buy. The stock isn't cheap, but the company's leadership in power and cooling, plus AI's shift from hype to real-world infrastructure spending, gives the thesis room to keep working.

If the "real economy" phase of AI is just getting started, Vertiv may remain one of the clearer ways to ride it, even if the path is bumpy.

Rick Orford has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Vertiv. The Motley Fool has a disclosure policy.