Momentum Builds on Strong AI Demand

This earnings season has marked a turning point for artificial intelligence (AI) stocks. It is not just the big tech companies driving the market rally anymore. Even the smaller and lesser-known companies tied to the AI infrastructure are also reporting solid earnings and revenue growth. One company benefiting from this trend is Vertiv Holdings (VRT), which recently reported a strong start to fiscal 2026. VRT stock is now trading around its all-time high today and has surged an impressive 115% year-to-date (YTD). This sharp move isn’t just AI hype anymore but is backed by strong business performance and growing demand for the kind of infrastructure needed to support AI.

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The AI Buildout Is Accelerating Faster Than Expected

As AI workloads grow and data centers become more complex, they require better power, cooling, and infrastructure solutions. Vertiv provides these backup power systems, thermal (cooling) systems, and integrated setups to ensure that servers, particularly those used for AI, operate smoothly without overheating or shutting down. This has created immense demand for its products. In the Q1 earnings call, Vertiv’s leadership made it clear that something fundamental has changed in recent months. Customers are no longer experimenting with AI infrastructure; they are, in fact, adapting it at scale.

Organic growth stood at 23% year-over-year (YoY) in the first quarter of fiscal 2026, while total revenue increased by 30% to $2.6 billion. Usually, high growth comes at the expense of profitability, but that is not the case with Vertiv. Adjusted EPS increased 83% to $1.17, with an adjusted operating margin of 20.8%, reflecting how the company is balancing expansion and discipline.  The company is investing aggressively in expanding manufacturing capacity, scaling service operations, and improving its engineering capabilities. These investments span everything from power systems to advanced cooling technologies, particularly liquid cooling, which is becoming essential for high-density AI workloads. Despite the expenditures, Vertiv managed to generate $653 million in free cash flow in the quarter.