Let’s say you’re thinking of investing relatively small amounts of money in stocks in a diversified portfolio and trying to spread risk by exploring exciting growth themes. In that case, the AI/datacenter space is a good place to start. Vertiv(NYSE: VRT) andnvent(NYSE: NVT) When you think about artificial intelligence (AI) applications and ways to profit from booming demand for data center spending, you may not think of it. However, the observation highlights the opportunity for investors to make profits. All three represent hidden ways to provide critical solutions and services to your data center and play themes.
Vertiv provides digital infrastructure for data centers and communications networks, including power management, switchgear, thermal management, monitoring and control infrastructure. Emersonelectricity It sold the company to Platinum Equity, a private equity company in Tomgores in 2016, and in 2020 it led the company to the market. HoneywellDavid Court.
The company is ideally located to benefit from growing interest in data center investments to support the growth of its applications, as well demonstrated by Vertiv’s booming backlog growth. That growth continued into the first quarter, with the backlog rising 10% since the end of 2024.
Data Source: Vertiv Presentation. Charts by the author.
Due to the strengths of orders and backlog growth, management has encouraged the midpoint of full-year organic revenue growth forecasts to 18% from previous estimates of 16% of recent first-quarter revenue calls.
However, management maintained a midpoint between profit margins, profits and cash flow guidance due to uncertainty over tariffs. Still, Vertiv’s management and Wall Street analysts are hoping for $1.3 billion in free cash flow (FCF) In 2025, Wall Street expects FCFs of $1.65 billion and $1.79 billion in 2026 and 2027.
The current market capitalization is $36.1 billion, and Vertiv will trade 28 times and 22.5 times FCF in 2025 and 2026.
Image source: Getty Images.
Nvent offers electrical connection and protection solutions to a wide range of industrial, commercial and residential customers. These end markets include data centers and power utilities that generate energy to supply power. Management made the conscious decision to sell its thermal management business in January and then complete the purchase of the Electrical Products Group business of infrastructure solutions available for $975 million, thereby increasing exposure to these attractive end markets.
This transaction means that infrastructure (data solutions and power utilities) accounts for 40% of the portfolio. It is also nvent’s fastest growing end market. CEO Beth Wozniak pointed out that organic orders for its data solutions rose at a strong double-digit rate in the first quarter compared to single-digit growth in other businesses. Ultimately, the strength of the data solution order led to the mid-October growth of first quarter organic orders.
Like Vertiv, Nvent’s excellent first quarter encouraged management to increase annual sales guidance to organic growth of 5% to 7% compared to previous estimates of 4% to 6%. Unlike Vertiv, however, NVENT management has increased its full-year revenue growth guidance from 22% to 26% compared to previous estimates of 20% to 24%. Additionally, these forecasts include the assumption of a negative tariff effect of $120 million.
When Wozniak said, “Looking at data solutions and power utilities is where growth accelerates, especially when it comes to accelerating,” it was clear that power utilities and data centers are driving Nvent’s growth.
Despite fears of slower data centre spending entering the revenue season and the possible impact of tariffs on business trust through April, data centre spending remains strong.
Wall Street analysts share this view, with nvent reporting $3.09 and $3.46 in profits in 2025 and 2026, with FCF reaching $406 million and $561 million. These estimates announced revenues of less than 20 times in 2025, revenues of 17.4 times in 2026, and FCFs of 17.7 times in 2025 and 2026. These are attractive multiples and the reverse can be, so NVENT is a great stock to buy.
Consider this before purchasing stock on Vertiv.
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