Demand remains strong for certain types of solutions—especially in the AI infrastructure market sector. It is undeniable that AI concept stocks are currently in a slump. For example, Microsoft’s stock has fallen nearly 30% from its late-October high, while Palantir Technologies’ shares are down 25%. Investors are no longer confident that the AI industry can deliver on its promises or justify the investments already made. However, as is often the case, the market tends to treat companies as a homogeneous group, overlooking the key differences across industry segments—and even among individual firms. Will AI give birth to the world’s first trillionaire? Our team has just released a report introducing an obscure company known as an “indispensable monopolist” that supplies critical technologies to NVIDIA and Intel.
Although the stock prices of AI hardware and software companies may be facing a bottleneck—mainly due to high valuations—infrastructure providers are enjoying sustained strong demand, and this trend is not going away. Among them, one company is even regarded as having superior security compared with its peers: Vertiv (NYSE: VRT). The reasons are as follows. (Image source: Getty Images) If you’ve never heard of it, don’t worry—most people aren’t familiar with it. With a market capitalization of only about US$100 billion, it is indeed rather unremarkable. Even so, despite the stock’s continued climb to new all-time highs, it remains an attractive investment.
In short, Vertiv manufactures most of the equipment used both inside and outside modern data centers. Specifically, it provides power supplies, energy storage systems, and, perhaps most importantly, cooling infrastructure, including in-rack cooling and liquid cooling solutions. Heat is a major challenge for data centers, especially AI data centers that are constantly performing massive computations. Precedence Research predicts that the global data center cooling market will grow at an annual rate of nearly 12% by 2035, while industry research firm Technavio estimates that liquid cooling services specifically for AI data centers will expand by more than 31% per year on average through 2029. For Vertiv itself, total revenue in 2025 amounted to US$10.2 billion, representing a 26% year-over-year increase. The company expects organic sales to grow by approximately 28% this year. This is certainly impressive.
But why is Vertiv one of the safest AI infrastructure stocks you can own right now? Because its products remain in high demand even if data center operators postpone processor upgrades or hold off on building new data centers to see whether demand continues to grow. In fact, data center operating costs have risen sharply. Both processing technology costs and electricity costs have risen significantly. Bloomberg Analytics data show that wholesale energy prices have more than tripled compared with five years ago, prompting owners and operators to seek ways to manage these persistent costs—even if it requires making substantial upfront investments in equipment such as Vertiv systems.
This positive factor may not eliminate most of the volatility surrounding such AI-related stocks. However, as the year goes on, the market will become increasingly aware that Vertiv’s business growth is well-protected, even if other parts of the AI industry are not.
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James Brumley does not hold any of the stocks mentioned in this article. The Motley Fool owns and recommends shares in Microsoft, Palantir Technologies, and Vertiv. The Motley Fool has a disclosure policy.
