Data center equipment company and Nvidia partner Vertiv Holdings (VRT 4.57%) can do nothing wrong. The stock is up an incredible 561% since the start of 2023 and put on another 20.5% in the week to Friday morning, according to data provided by S&P Global Market Intelligence.
The latest move comes after Vertiv released a stellar set of first-quarter earnings, which saw the company blast past management's expectations, raise full-year guidance, and report 60% growth in organic orders.
Vertiv's growth momentum
The company's growth is driven by data center spending and, in turn, by heavy investment in artificial intelligence (AI) applications. While it's become a favorite theme among investors, Vertiv has the order growth to back up the optimism.
Here are a few highlights from the quarter:
- Organic sales up 8% to $1,639 million compared to guidance for a 5% organic increase.
- Adjusted operating profit of $249 million compared to guidance for $210 million.
- Full-year sales guidance raised to 12% organic growth from 10% previously.
- Full-year adjusted operating profit guidance raised to $1.35 billion from $1.3 billion.
Frankly, it's hard not to think management is being conservative with guidance. After all, the first-quarter adjusted operating profit beat internal expectations by $39 million, and organic orders grew at 60%. In comparison, management only raised its full-year adjusted operating profit by $50 million.
Image source: Getty Images.
More growth to come
Moreover, CEO Giordano Albertazzi noted that "most of the orders overage in Q1 is for deliveries beyond '24." As such, it's reasonable to expect investors to start penciling in significantly higher profits for 2025. Indeed, the stock received a slew of analyst upgrades in the days following the results, with analysts citing the early-cycle nature of the AI spending boom.
Investors will hope they are correct; if they are, the stock will likely continue its remarkable run.
