Vertiv Plunges 20% in Three Months: Buy, Sell, or Hold the Stock?

Vertiv VRT shares have lost 20% in the trailing three months, underperforming the broader Zacks Computer and Technology sector’s decline of 5.4%. The Zacks Computers - IT Services industry increased 0.2% in the same time frame. 

The decline can be attributed to timing shifts in large, multiphase project execution and temporary supply-chain congestion, particularly within complex infrastructure deployments. Tariffs and trade-policy changes continue to create cost and logistics volatility. 

VRT Stock Performance

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However, the company is benefiting from its rich partner base and extensive product portfolio spanning thermal systems, liquid cooling, UPS, switchgear, busbars and modular solutions. Vertiv remains leveraged to rising data center power and thermal needs as AI deployments drive higher infrastructure density and faster build cycles.

VRT Benefits From Strong AI Infrastructure Demand

Vertiv is benefiting from strong demand for AI infrastructure as hyperscalers, colocation providers, neocloud operators and enterprises continue to expand data-center capacity. The company’s global pipeline remains robust across its core markets, particularly in the Americas and APAC regions. In the second quarter of 2026, net sales increased 24% year over year, with the Americas and APAC both growing 29%. EMEA also returned to positive net sales growth. 

Vertiv’s differentiated technology portfolio is another pillar of its growth. The company is at the forefront of power architecture evolution, supporting both AC and emerging 800V DC solutions. Collaborations with industry leaders like NVIDIA and Foxconn’s VisionBay AI have resulted in landmark projects, such as Taiwan’s first AI data center featuring NVIDIA GB300 and the world’s first AI data center adopting 800V DC architectures.

Acquisitions have also strengthened Vertiv’s portfolio.  The recent acquisitions of ThermoKey and Strategic Thermal Labs have expanded Vertiv’s capabilities in heat rejection and high-density thermal management, respectively. These moves enhance Vertiv’s ability to offer comprehensive solutions across the thermal spectrum, from heat rejection to direct-to-chip cooling.  In the second quarter of 2026, acquisitions contributed 5% to revenues.

VRT Benefits From Margin Gains

Vertiv is benefiting from significant margin gains. In the second quarter of 2026, the company reported an adjusted operating margin of 22.6%, a substantial increase of 410 basis points year over year and well above its previous guidance. This margin expansion was driven by disciplined operational execution, productivity improvements and favorable price-cost dynamics, partially offset by tariff impacts.

Margin improvement was broad-based across Vertiv’s geographic segments. In the Americas, strong commercial execution and operational performance drove adjusted operating margin expansion of 360 basis points year over year. APAC margins improved 270 basis points as strong revenue growth generated operating leverage, while EMEA recorded a 380-basis-point improvement, aided by better operational execution. The broad-based gains indicate that Vertiv’s profitability improvement extends beyond any single region.

Vertiv expects margin momentum to continue in the second half of 2026. For the third quarter of 2026, adjusted operating profit is projected to be between $898 million and $938 million, with an adjusted operating margin of 24% to 25%, supported by organic growth, operating leverage and productivity. Regional manufacturing, supply chain actions and disciplined capacity investment remain key to sustaining the margin trajectory as projects scale. Management raised 2026 adjusted operating margin guidance to 23.3%-24.3% and expects pricing to exceed inflation, including current tariffs and countermeasures.

VRT Initiates Positive Third-Quarter Guidance

Vertiv’s expanding AI data center footprint and manufacturing capacity signal further upside potential.  For the third quarter of 2026, Vertiv expects net sales of $3.65 billion to $3.85 billion and adjusted earnings of $1.77 to $1.83 per share. 

The Zacks Consensus Estimate for Vertiv’s third-quarter 2026 revenues is pegged at $3.75 billion, suggesting growth of 40.27% year over year.

The Zacks Consensus Estimate for third-quarter 2026 earnings is currently pegged at $1.81 per share, which has been unchanged over the past 30 days. The figure indicates a year-over-year increase of 45.97%.

Vertiv Holdings Co. Price and Consensus

Vertiv Holdings Co. price-consensus-chart | Vertiv Holdings Co. Quote

VRT Faces Stiff Competition

Despite an expanding portfolio, the company is facing stiff competition from companies like Teradyne TER, Super Micro Computer SMCI and Amphenol APH. Each of these companies is expanding its offerings to support high-density, AI-driven data center deployments.

Teradyne is benefiting from the surging demand for AI infrastructure, which has become a major growth driver for the company. In the second quarter of 2026, AI-driven revenues accounted for more than 60% of total revenues, underscoring the effectiveness of Teradyne’s wafer-to-AI data center strategy. Teradyne’s focus on AI is driving robust growth across its semiconductor test and robotics divisions.

Super Micro Computer’s exposure to AI infrastructure remains a central growth driver. Fiscal 2026 revenues rose 78% to $39.1 billion, and management said that more than $60 billion of new orders were received during the fourth quarter, leaving a record backlog entering fiscal 2027. Super Micro Computer’s AI solutions represented about 60% of fourth-quarter fiscal 2026 revenues because several large projects shifted timing, but management expects AI-related solutions to exceed 80% of revenues in the future based on backlog.

Amphenol is benefiting from the surge in demand for AI infrastructure, which has become a transformative force for the company’s growth and market positioning. In the second quarter of 2026, IT datacom represented about 43% of sales and increased 63% organically year over year. This robust performance was driven by accelerating investments in AI data centers and Amphenol’s ability to capture a significant share of this unique interconnect opportunity.

Vertiv Stock Is Trading at a Premium

Vertiv is currently overvalued, as suggested by a Value Score of D.

In terms of the trailing 12-month Price/Book, Vertiv is currently trading at 20.94X compared with the broader Computer and Technology sector’s 8.91X.

VRT's Valuation

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Conclusion

Vertiv’s strong AI infrastructure demand, expanding margins, and upbeat growth outlook support its long-term prospects. However, near-term execution risks, supply-chain volatility and a premium valuation remain headwinds. Stiff competition also remains a concern.

Vertiv currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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