What happened
Vertiv Holdings (VRT +5.25%) delivered blowout earnings thanks in no small part to the boom in artificial intelligence (AI) spending. Investors looking for new ways to capitalize on AI are taking note, sending shares of Vertiv up nearly 30% on Wednesday morning.
So what
Vertiv sells hardware, software, and analytics to help manage data centers, industrial facilities, and communications networks, including a range of power, cooling, and IT infrastructure products. The company's portfolio goes well beyond data centers, but power-hungry AI models have led to a surge in demand.
The company reported second-quarter adjusted earnings of $0.46 per share, beating estimates by $0.17, on revenue of $1.73 billion. The sales figure was up 23.6% year over year, and beat the consensus estimate by about $100 million.
Vertiv's adjusted operating margin for the quarter was 14.5%, up 860 basis points year over year. Operating cash flow in the quarter was $254 million, an increase of $460 million from the same three months of 2022. Demands to power new AI models are a big part of that surge.
NYSE: VRT
Key Data Points
Now what
Vertiv is forecasting third-quarter earnings of between $0.41 and $0.46 per share, well above the $0.33 consensus. It also raised its full-year earnings guidance to $1.54 to $1.64 per share, up from $1.22 to $1.32.
It is hard to predict how long a trend will last, and at some point, spending around AI could cool. But the need for ever-more-sophisticated data centers is unlikely to wane. Vertiv is benefiting from the trend, and investors appear confident that will carry on into the quarters to come.
