Vertiv is drawing increased attention from investors as artificial intelligence-driven data center build-outs ramp up demand for power and cooling equipment. The company reported strong first-quarter growth, supported by a surge in orders from customers expanding high-density AI clusters, and it said its backlog climbed to $15 billion—providing visibility into demand extending well beyond the current year.
With AI racks continuing to push power requirements higher, investors are focusing on companies positioned to manage electricity distribution and thermal loads, areas where Vertiv operates across UPS systems, switchgear, and liquid-cooling solutions.
Key takeaways
- Sales growth: Vertiv reported net sales of $2.65 billion in the first quarter, up 30% year over year.
- Catalyst: Demand for power and thermal management systems is being boosted by AI data center expansion and higher rack densities.
- Backlog expansion: The company’s backlog rose to $15 billion, supporting order visibility into 2028.
- Margin improvement: Operating margin expanded to 20.8%, and the company updated full-year adjusted operating profit guidance to $3.2 billion.
- Implication: As rack-level power needs rise, investors may continue to favor “pick-and-shovel” infrastructure suppliers with large, contracted pipelines.
What drove the move
Data centers are consuming more power per rack as AI workloads intensify. The International Energy Agency has estimated that a single rack in an advanced data center could reach peak power demand equivalent to 65 households by 2027. That shift increases the importance of systems that can distribute electricity efficiently and remove heat without disrupting operations—core functions of Vertiv’s business.
Vertiv said its first-quarter performance reflected strong customer activity tied to AI deployment cycles. The company reported 30% year-over-year net sales growth to $2.65 billion, with the Americas segment showing 44% organic growth. Vertiv attributed the gains largely to AI data center demand, as hyperscalers and other large operators continue to expand capacity for training and inference workloads.
Market reaction: margins, guidance, and order visibility
Beyond revenue, Vertiv highlighted improving profitability and forward visibility. In the first quarter, its operating margin increased to 20.8%. The company also updated its full-year adjusted operating profit guidance to $3.2 billion, pointing to confidence in the demand backdrop.
Perhaps more consequential for investors is the size and character of the company’s backlog. Vertiv reported a $15 billion backlog and said customers are increasingly placing orders in advance and targeting delivery windows of 12 to 16 months. The company added that this ordering pattern supports revenue visibility through 2028.
Vertiv also addressed concerns that fully integrated systems could lead to double-ordering. CEO Gio Albertazzi said that double-ordering is unlikely, as customers are buying integrated solutions optimized for specific silicon footprints, including next-generation platforms from major GPU suppliers.
Bigger picture: why higher rack densities matter
Vertiv’s outlook is closely tied to the industry trend of rising rack-level power demand. The company said rack densities have increased from 140 kilowatts to 300 kW and are expected to reach 600 kW. That trajectory implies substantially larger cooling and power infrastructure requirements per rack, expanding the market for equipment designed to manage both electrical load and thermal output.
As part of that shift, Vertiv expanded its total addressable market from $62 billion to $75 billion. The company also outlined efforts to broaden its product footprint and develop pre-engineering modular solutions aimed at meeting faster build cycles and larger capacity requirements.
While the company’s growth profile has attracted demand, valuation remains a key variable for investors. The article noted Vertiv is priced around 73 times last year’s earnings, implying that market participants are paying a premium for expected growth. Analysts cited in the original reporting project earnings per share growth of 57% this year and 36% in 2027, which corresponded to a forward valuation of 34 times 2027 earnings.
What to watch next
Investors will likely focus on whether Vertiv can convert backlog into revenue and sustain margin gains as customers advance delivery schedules. The next set of catalysts to watch includes future quarterly updates for sales conversion, any additional guidance changes, and broader signals on the pace of hyperscaler data center capex. Upcoming industry and macro inputs—especially those affecting power costs, supply chain stability, and interest-rate expectations—could also influence sentiment around data center infrastructure spending.
