Shares in data center infrastructure company Vertiv (VRT +6.77%) rose by 9.4% in the week through Friday morning. The move comes in an exciting week for the artificial intelligence (AI) and data center market.
Oracle's big deal
The sector was buoyed this week by the news of a deal between OpenAI and Oracle, whereby the former will buy $300 billion worth of computing power from the latter over five years. The deal further strengthens the trend toward massive investment in data centers. That's great news for a company like Nvidia partner Vertiv that offers power, thermal management, and other solutions for data centers.
NYSE: VRT
Key Data Points
As readers already know, Vertiv has raised its full-year sales, earnings, and cash flow guidance through the year due to the strengthening environment.
It's a strong performance, and the company's orders momentum (organic orders rose 15% year over year in the second quarter) indicates more growth ahead. The Oracle deal creates an environment in which Vertiv can continue to win orders.
Where next for Vertiv?
In addition, the company is preparing for another leg of growth by developing power infrastructure solutions for the next generation of data center technology, pioneered by Nvidia. The new 800V high voltage direct current (HVDC) data centers offer efficiency and cost advantages over existing data centers, and are set to launch in 2027.
Suppose Oracle's news is anything to go by. In that case, the massive ramp-up in AI/data center spending will carry through into the next few years, meaning that the technology Vertiv is developing now will see strong demand in the coming years.
