This earnings season has marked a turning point for artificial intelligence (AI) stocks. It’s not just the big tech companies that are driving the market rally. Even smaller and lesser-known companies tied to AI infrastructure are also reporting strong earnings and revenue growth. One company benefiting from this trend is Vertiv Holdings (VRT), which recently reported a strong start to fiscal 2026. VRT stock is now trading near all time today and is up 115% year to date (YTD). This sharp movement is no longer just AI hype but is supported by strong business performance and a growing demand for the kind of infrastructure needed to support AI.
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As AI workloads grow and data centers become more complex, they require better power, cooling, and infrastructure solutions. Vertiv provides these backup power systems, thermal (cooling) systems, and integrated setups to ensure that servers, especially those used for AI, run smoothly without overheating or shutting down. This has created a huge demand for its products. On the Q1 earnings call, Vertiv’s leadership made it clear that something important has changed in recent months. Customers are no longer experimenting with AI infrastructure; in fact, they adjust it to a degree.
Organic growth stood at 23% year-over-year (YoY) in the first quarter of fiscal 2026, and revenue increased 30% to $2.6 billion. Usually, high growth comes at the expense of profits, but not so with Vertiv. Adjusted EPS increased 83% to $1.17, on an adjusted operating margin of 20.8%, reflecting how the company balances growth and performance. The company is investing heavily in increasing production capacity, scaling service operations, and developing its engineering capabilities. These investments include everything from electrical systems to advanced cooling technology, especially liquid cooling, which is critical to the survival of intensive AI operations. Excluding expenses, Vertiv was able to generate $653 million in free cash flow for the quarter.
Management makes sure that when supply gets tight, the company doesn’t become a bottleneck in a fast-growing market. Based on its expanding capacity and strong demand, Vertiv has strengthened its outlook for the full year. The company expects 51% YoY in adjusted EPS driven by 34% increase in sales. Adjusted operating margin would be around 53%. It also generates free cash flow of up to $2.2 billion. Analysts expect Vertiv’s earnings to grow another 33.5% in 2027.
VRT Stock: Buy Now or Too Late?
Vertiv’s inclusion in the S&P 500 Index ($SPX) this year also attracted a lot of attention by automatically putting the company on the radar of large institutional and passive investors. Being part of the index also demonstrates to the market that Vertiv has achieved a reasonable level of size, consistency, and financial strength expected of large-cap leaders. This also helps justify its premium valuation over time as the stock currently trades at 51x forward 2026 earnings. VRT is the best AI infrastructure stock to pick up right now. But risk-averse investors may choose to wait for a more attractive entry point.
On Wall Street, VRT stock is a “Moderate Buy” overall. Of the 25 analysts covering the stock, 17 rate it a “Strong Buy,” two give it a “Neutral Buy,” five recommend it a “Hold,” and one has a “Strong Sell” rating. It is currently sitting above its average price of $326.52. However, its high price of $373 indicates a potential rally of 5% over the next 12 months.
As of the date of publication, Sushree Mohanty did not have (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
