Data center infrastructure provider Vertiv Holdings offers investors a new buy point after easing from a high. Vertiv stock pulled back to a short-term moving average on Wednesday.
The IBD 50 Growth Stocks To Watch name checks the boxes for solid fundamentals and robust price performance. The company is looking to expand its artificial intelligence infrastructure footprint.
Vertiv, which is also in the IBD Big Cap 20 list, develops infrastructure for data centers, as well as industries including health care, telecom, and manufacturing. Its services range from battery energy storage, cooling services, and uninterrupted power supply.
Vertiv stock is also an IBD Leaderboard and a MarketSurge Growth 250 name.
It ranks No. 1 out of 51 stocks in the Electrical-Power/Equipment group, which holds the 15th spot out of the 197 industry groups that Investor's Business Daily tracks. The group holds a best-possible A+ Group Relative Strength Rating.
Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks
Vertiv Stock Tumbles After A Long Run
Vertiv stock sank more than 6% Wednesday afternoon and fell below its 21-day exponential moving average.
Vertiv stock had extended a win streak after the company easily topped second-quarter profit and revenue estimates on July 30. The stock climbed for seven straight sessions in heavy volume before pulling back. Its recent high of 153.50 offers a handle entry from a V-shaped cup base.
But volume has been trending lower during its recent pullback, indicating investors and institutions are not bailing on the stock. Shares were due for a break after nearly tripling from the low of 53.60 in early April.
Vertiv stock has a 92 Relative Strength Rating, meaning it has outperformed 92% of names in the Investor's Business Daily database. Moreover, shares have climbed around 18% so far this year, despite the recent drop.
Its Accumulation/Distribution Rating of A- indicates fairly heavy institutional buying over the last 13 weeks. And its 1.5 up/down volume ratio shows positive demand over the last 50 days.
Data Center Services Name Sees Bright Future
Vertiv's second-quarter profit grew 42% following growth of 77% and 49% in the prior two quarters. Its 35% sales growth was the highest in eight quarters, and its orders increased around 15%.
"We are strategically investing in capacity expansion and accelerating our innovation pipeline to capitalize on unprecedented data center growth, particularly in AI-enabled infrastructure," Vertiv Chief Executive Officer Giordano Albertazzi said in the earnings report. The company sees sustained long-term growth in the data center industry.
Vertiv projects third-quarter net sales in the $2.510 billion to $2.590 billion range.
The data center infrastructure provider raised its full-year 2025 earnings guidance to a range of $3.75 to $3.85 per share. It also lifted its 2025 revenue forecast to a range of $9.925 billion to $10.075 billion. Both outlooks topped views.
Analysts' estimates show earnings growth ranging from 24% to 38% over the next four quarters. And third-quarter revenue forecasts call for a 23% rise, followed by a slide to 12% over the following four periods.
Its 2023, profit exploded 234% followed by 61% expansion in 2024. Such growth helped Vertiv earn a 98 Earnings Per Share Rating. The company also scores a top-notch 99 Composite Rating.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
