Two companies are set to capitalize on the burgeoning demand for artificial intelligence and data center infrastructure. Investors seeking exposure to this transformative trend might overlook these firms, yet they present compelling opportunities. Vertiv and nVent offer essential solutions that underpin the growth of modern digital infrastructure.
Vertiv is a key player in the digital infrastructure space, providing critical components for data centers and communication networks. Its product lineup spans power management, thermal control, and monitoring systems. Originally part of Emerson Electric, it was acquired by Platinum Equity in 2016 and later went public in 2020. Under the leadership of its experienced executive chairman, David Cote, Vertiv has positioned itself to benefit from increasing investments in data centers. The company's robust order backlog, growing at a double-digit pace, reflects strong market confidence. Management recently revised upward their full-year revenue growth forecast, anticipating continued momentum. Although uncertainties such as tariffs remain, analysts foresee substantial free cash flow generation in the coming years, making Vertiv an attractive long-term investment if AI-driven demand persists.
nVent focuses on electrical connection and protection technologies, serving diverse sectors including data centers and power utilities. By strategically divesting non-core businesses and acquiring Avail Infrastructure Solutions' electrical products group, nVent has bolstered its presence in high-growth markets. These moves have reshaped its portfolio, with infrastructure now accounting for 40% of its offerings. The company reported impressive organic order growth in its data solutions segment during the first quarter, driving overall sales increases. Encouraged by these results, nVent raised both its revenue and earnings guidance for the year. CEO Beth Wozniak emphasized the pivotal role of power utilities and data centers in driving future growth. Analysts project solid earnings and free cash flow figures over the next few years, valuing nVent attractively relative to its peers. This positions nVent as a promising stock for investors looking to tap into the ongoing data center expansion.
The evolving landscape of digital infrastructure presents vast opportunities for companies like Vertiv and nVent. Their commitment to innovation and strategic positioning underscores the importance of identifying hidden gems within established industries. As technology continues to advance, embracing forward-thinking investments can lead to sustainable growth and prosperity, benefiting both companies and their shareholders alike.