Vertiv Stock Recently Hit an All-Time High. Does Wall Street See More Upside?

It's been a fantastic past 12 months for Vertiv (NYSE: VRT) shareholders. Even with the stock's pullback from its mid-May record-breaking peak, it's still up about 96% from where it traded at this time last year.

Veteran investors know such a big run-up in such a short period of time is a tough act to follow, of course. Some are even anticipating more pullback. And maybe that's what's in the cards.

The analyst community, however, remains more optimistic about this ticker's foreseeable future.

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Vertiv is reporting plenty of growth

The company makes equipment used in data centers, by the way. Not processing chips like those supplied by Nvidia, or networking hardware like that made by Broadcom. Rather, Vertiv manufactures power systems, cooling solutions, and the specialized racks and enclosure frames that make it possible to integrate this equipment with the usual data center tech.

Yes, the rapid rise of artificial intelligence is proving very good for business. Vertiv's first-quarter top line of $2.65 billion was up 30% year over year, and is expected to grow about as much for the entirety of 2026. Analysts are looking for comparable growth next year as well. Moreover, the company is profitable. Last year's bottom line of $4.20 is expected to reach $6.48 per share this year, en route to $8.83 in 2027.

This fantastic growth course begs one question: Why has the stock been sinking since May's high, falling 24% from that peak?

Valuation may have a little something to do with it. At its peak, VRT was trading at more than 58 times this year's projected profits, and over 40 times next year's expected bottom line. That's a steep price to sustain, no matter how compelling your growth story is. It's even tougher to sustain when investors start to doubt artificial intelligence's long-term future.

Curiously, though, analysts aren't deterred.

Wall Street is (mostly) still on board with Vertiv

OK, a handful of analysts are doubters. Two of the 33 covering this stock rate it as underweight. The lowest price target is $255, 11% below the stock's current price.

The vast majority of the analyst crowd watching this stock, however, is firmly bullish. Indeed, 22 of the 33 analysts covering it consider VRT a strong buy, while the consensus price target stands at $377, more than 31% above Vertiv shares' present price. It's a target, of course, that rightfully doesn't reflect too much concern about a rich valuation.

What are these analysts seeing that others aren't? It's not what they're seeing. Rather, it's all the noise they're looking past. The AI industry's stocks may be losing ground because growing infrastructure spending may or may not pay off soon enough to suit investors. But there's no denying that artificial intelligence will feature prominently in the future, once its key players refine their businesses and meet actual needs.

In this vein, a Precedence Research outlook indicates that the worldwide AI infrastructure market is poised to grow at an average annualized rate of nearly 22% through 2035. Vertiv is well positioned to win at least its fair share of this growth.

Just bear in mind that not even analysts expect VRT shares to reach their consensus target in a straight line.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Nvidia, and Vertiv. The Motley Fool has a disclosure policy.