What Happened?
Shares of data center products and services company Vertiv (NYSE: VRT) jumped 11.1% in the morning session after the company presented a positive outlook at the Goldman Sachs Communicopia + Technology Conference. During the event on September 9, executives highlighted robust order growth driven by demand from hyperscalers, colocation data centers, and NeoCloud clients. The company reported a 15% increase in second-quarter orders and is targeting a 25% EBIT (Earnings Before Interest and Taxes) margin by 2029. To meet growing demand, particularly for high-density computing like AI, Vertiv is expanding its liquid cooling capacity and service organization. This strategy appears to be paying off, as the company noted it is gaining market share in the key colocation and hyperscale segments, signaling strong business momentum.
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What Is The Market Telling Us
Vertiv’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. But moves this big are rare even for Vertiv and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 12 days ago when the stock dropped 5.2% after a broader market pullback that particularly impacted the technology and semiconductor sectors. The decline was not isolated to Vertiv, as major indices retreated from recent all-time highs. The S&P 500 dropped by 0.7%, while the tech-heavy Nasdaq Composite fell 1.2%. The semiconductor industry faced significant pressure, with the PHLX Semiconductor Index declining by over 3%. This sector-wide downturn also affected major technology companies, including Nvidia and Broadcom, which experienced notable drops. The broad-based selling in the tech space appears to be the primary driver behind the pressure on Vertiv's shares.
Vertiv is up 17% since the beginning of the year, but at $138.30 per share, it is still trading 9.9% below its 52-week high of $153.49 from January 2025. Investors who bought $1,000 worth of Vertiv’s shares 5 years ago would now be looking at an investment worth $8,184.
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