Key Takeaways
- Vertiv shares jumped 16% on October 28 after its third-quarter organic orders more than doubled and it raised its 2026 sales outlook by $650 million at the midpoint.
- Vertiv’s customers more than doubled their orders just as the market had started pricing in delays.
- The main risk is financing, since orders can still slip if customers can’t fund their sites.
- Vertiv went into the report at 26x forward earnings, well below its 34x three-year average, and analysts’ estimates look set to rise.
Vertiv (VRT) just gave its answer to October’s selloff in AI power stocks: orders more than doubled.
Shares of the Nvidia (NVDA) partner jumped 16% on October 28, a week after the two companies unveiled a joint AI data center design. The third-quarter report also raised Vertiv’s full-year outlook. The stock gave back some of the jump on October 30, closing at $232.50, still about 11% above where it went into the report.
That’s quite the turn from the week before the report. Vertiv had fallen about 45% from its all-time high, and a post on Xfrom @BoringBiz_ called the whole AI infrastructure group “Either a falling knife or a generational buying opportunity, depending on which side of the AI debate you sit on.”
CEO Giordano Albertazzi has picked his side. “We are in the middle of the largest infrastructure buildout and it’s accelerating,” he said in the earnings release. “The demands on data center infrastructure are evolving faster than ever, and Vertiv’s role in that buildout keeps expanding.”
Which is a long way from “falling knife.”
Vertiv’s Numbers Back Him Up
Orders grab the headline, but this quarter also dealt with the delivery worry. Back in July, Vertiv’s second-quarter sales of $3.27 billion landed below the $3.35 billion midpoint of its guidance, which management put down to timing shifts from temporary supply chain congestion and multi-phase projects. That’s exactly the kind of delay the market started pricing in across AI power stocks in October.
This time, sales rose 61% to $4.31 billion (55% organic), about $460 million above the top of Vertiv’s own guidance range. Every region grew, led by the Americas at 66% organic. Adjusted operating margin came in at 25.2%, above the 24% to 25% management had guided to, and adjusted EPS grew 78% to $2.21.
So Vertiv raised its 2026 outlook again: $14.45 billion to $14.85 billion in sales (up from $13.8 billion to $14.2 billion), and $7.10 to $7.20 in adjusted EPS (up from $6.65 to $6.75). Its fourth-quarter guidance calls for $4.41 billion in sales at the midpoint, with 50% organic growth.
Analysts had expected less going into the report…
The new guidance midpoint of $14.65 billion already sits about $650 million above that 2026 consensus. And with orders doubling, I’d expect the $18.3 billion estimate for 2027 to climb too.
TIKR Tracks 62 Analysts on Vertiv. How Many Say “Buy”?
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The Money Has to Keep Flowing
Of course, an order isn’t a sale yet. Vertiv’s annual report says orders in its backlog can be cancelled or rescheduled. And the borrowing behind many AI data centers got a lot pricier in October, with CoreWeave’s 2032 bonds nearing a 15% yield. If customers can’t fund their sites, some of today’s orders become next year’s delays.
But customers worried about funding don’t usually double their orders and pay up front. By September 30, Vertiv was holding $4.12 billion of customers’ advance and milestone payments, more than double the $1.81 billion at the end of 2025. That cash flatters free cash flow, though: the prepayments brought in $2.31 billion over the first nine months, a bit more than the $2.23 billion of adjusted free cash flow Vertiv generated. The third quarter leaned on them less, with $490 million of prepayments against $652 million of free cash flow, up 50%.
Plus: Vertiv’s role keeps growing, as Albertazzi says. The stock rallied on October 21 on that joint design with Nvidia, which Vertiv says could deliver up to 30% more token output in a data center’s first year in its modeled scenario.
Still Cheaper Than Usual
Going into the report, Vertiv traded at 26x forward earnings. That’s well below its 34x average over the last three years and less than half its 55x peak in May…
The October 28 jump took it to about 31x, and the October 30 pullback brought it back under 30x, before analysts raise their estimates.
What Vertiv’s February Backlog Has to Show
The selloff priced in delays that Vertiv’s customers aren’t making, and I’d still own the stock at $232.50, under 30x forward earnings with estimates headed up. I wouldn’t call it cheap, though. The discount only holds against the last three years, and free cash flow loses its biggest tailwind if those prepayments slow.
Those orders still have to ship. Management also said on the call that it won’t share orders data going forward, so the next hard check is the year-end backlog in Vertiv’s annual report, due around February. It stood at $15.0 billion at the end of 2025.
So What Is Vertiv Stock Actually Worth?
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