Artificial intelligence (AI) is clearly a multiyear growth trend that's poised to have a major impact on the global economy. Consulting giant PwC estimates that the technology could boost global gross domestic product (GDP) 15 percentage points over the next decade.
In fact, it won't be wrong to call AI a supercycle, as this technology is driving a multiyear growth across several sectors such as chips, smartphones, personal computers, software, and others. Demand for AI-related hardware and software has been exceeding supply, as evidenced by the shortage of data center components and the large backlogs of companies selling AI software.
However, AI data centers need more than just chips to function effectively. They must manage the intense heat generated while tackling AI workloads, and that is where liquid cooling comes into play.
Vertiv Holdings (VRT +0.67%) is one such company that helps AI data centers improve energy efficiency through its liquid-cooling solutions. The stock shot up 238% over the past year, and the secular growth of the liquid-cooling space should help sustain its terrific momentum.
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Liquid-cooling and AI infrastructure demand are supercharging Vertiv's growth
Vertiv designs critical infrastructure for data centers, such as power supply systems, thermal management systems, and server racks and enclosures. The company has been leaning heavily into the thermal management space, which isn't surprising, as management says that "the complexity of hybrid air and liquid cooling created by AI workloads presents significant opportunities."
NYSE: VRT
Key Data Points
As a result, Vertiv has been expanding its product portfolio to offer more liquid-cooling products. The company has struck partnerships with the likes of Nvidia and Intel to design liquid-cooling solutions for their AI chip systems, including Nvidia's latest Vera Rubin platform. Importantly, Vertiv provides end-to-end solutions for companies looking to deploy AI infrastructure by integrating power, cooling, and support services, claiming that it can reduce deployment time by up to 50%.
Not surprisingly, there is terrific demand for the company's offerings. Vertiv had a book-to-bill ratio of 2.9 in Q4 2025. This metric is calculated by dividing the new orders Vertiv received by the revenue recognized during the quarter, suggesting that it received significantly more orders than it fulfilled.
As a result, Vertiv ended 2025 with an order backlog of $15 billion. That was well above the $10.2 billion revenue it generated during the year. Even better, Vertiv's margin is expanding due to higher production volumes, improved productivity, and favorable pricing.
These factors led to a 47% increase in adjusted earnings in 2025. The company anticipates 42%-45% growth in adjusted earnings this year.
Importantly, the terrific growth opportunity in liquid-cooling and other AI infrastructure components should ensure long-term growth for Vertiv.
More upside likely as liquid-cooling demand accelerates
The demand for liquid cooling in data centers is anticipated to grow at an annual rate of 31.5% through 2033, driven by complex AI workloads that require more than traditional air-cooled systems can provide.
This should lead to increased demand for Vertiv's liquid-cooling systems. That's why analysts are expecting robust revenue growth.
Data by YCharts.
Vertiv should be able to sustain its healthy growth beyond the next three years due to the growth potential of the liquid-cooling market, making it a solid growth stock to buy to capitalize on this fast-growing niche, as it is trading at less than 10 times sales right now.
