Vertiv Holdings Co - Class A

Vertiv Holdings continues to prove its value to its customers who are building out data centers. While not very glamorous, their suite of cooling and power management infrastructure products are essential to the AI wave. This positions Vertiv favorably as demand for data center infrastructure grows alongside advancements in AI technology.

Vertiv Holdings continues to prove its value to its customers who are building out data centers. While not very glamorous, their suite of cooling and power management infrastructure products are essential to the AI wave.

Vertiv specializes in critical cooling and power management infrastructure technologies, catering primarily to data center clients. We believe Vertiv is well positioned as a direct beneficiary of the accelerating data center buildout, where its broad portfolio of power and cooling solutions addresses essential requirements for both new construction and existing facility upgrades. During the quarter, shares contributed positively to performance after the company delivered strong fiscal fourth-quarter results and issued full-year revenue guidance well ahead of consensus expectations. Order growth and backlog expansion were particularly notable, reflecting the depth and durability of demand for data center infrastructure.

Shares in VRT outperformed after the company delivered a blowout Q4 earnings report, where orders significantly exceeded estimates. Earnings also beat lofty expectations. The combination highlighted the ongoing acceleration of AI-related demand for data center buildout. By region, the company highlighted the 'coiled spring' in Europe, where activity had been relatively subdued but now there is a greater sense of urgency. Our meeting with top management at an investor conference confirmed our view that the company is one of the prime beneficiaries of this secular trend, given its position as a one-stop shop providing innovative solutions in partnership with customers.

We sold Vertiv Holdings Co (VRT) as it breached our three-year price target late last year, accounting for nearly half of the Strategy’s relative performance shortfall in the quarter. Despite its shares continuing their ascent, we believe the company is facing an already-lofty valuation. The underperformance in the quarter was driven by relative weakness in Industrials, Real Estate, and Technology, with unowned benchmark holdings, including Vertiv, contributing to the lag.

In the first quarter of 2026, Vertiv Holdings Co. was a top contributor to our portfolio, demonstrating strong customer order growth and adding to an already robust backlog in the computing infrastructure sector. We remain confident in their essential role for customers and the solid prospects for growth in their business. The demand for productivity tools, particularly those driven by AI, continues to rise, which bodes well for Vertiv's future performance.

Vertiv, a manufacturer of power and precision cooling systems, continued to benefit from the buildout of data center and AI infrastructure. This positions the company well to capitalize on the growing demand for these critical technologies, suggesting a strong growth trajectory in the coming years.

Vertiv Holdings Co. is experiencing a surge in business related to the AI buildout, which positions it well within the growing computing sector. The company is a strong contributor to our portfolio, reflecting its robust performance and alignment with current market trends. We believe that the ongoing demand for power conditioning and management tools will continue to drive growth for Vertiv, making it a valuable holding as we navigate the evolving economic landscape.

Vertiv Holdings Co is mentioned as part of the portfolio's performance highlights, but there is no explicit directional argument made about its future prospects or valuation.

In the second quarter of 2025, Vertiv Holdings Co. was a top contributor to the portfolio, with an average contribution of 1.75%. The manager noted that the portfolio's stock selection in small cap companies, including Vertiv, contributed positively to relative performance. The outlook for small and mid-cap equities remains cautiously optimistic, with a focus on companies like Vertiv that possess earnings visibility and are less likely to be affected by macroeconomic factors. This positioning reflects a belief in the growth potential of Vertiv within a supportive valuation backdrop.