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Investing.com - Citi is defending Vertiv Holdings (NYSE:VRT) and Nvent Electric (NYSE:NVT) following a significant sell-off triggered by Amazon Web Services’ (AWS) announcement of new liquid-cooled servers. The announcement comes as Amazon (NASDAQ: AMZN), AWS’s parent company, maintains strong financial health with revenue growth of 10.08% and a substantial market capitalization of $2.36 trillion.
Vertiv shares fell 6.63% while Nvent dropped 2.31% against the S&P 500’s 0.17% gain after AWS revealed its P6e-GB200 Ultra Servers equipped with liquid cooling infrastructure to support NVIDIA Grace Blackwell SuperChip. The announcement raised investor concerns about potential in-house production of cooling components by AWS.
Citi characterized the sell-off as "overdone," noting that recent order strength should provide good near-term visibility for both companies. The firm emphasized that Vertiv’s competitive advantages remain "largely intact," including its market-leading portfolio in power and thermal management, global service offerings, and strong relationships with chip manufacturers. Amazon’s strong financial position, with an EBITDA of $126.14 billion and healthy profit margins, suggests continued investment in data center infrastructure.
For Vertiv specifically, Citi views the sell-off as a "buying opportunity," highlighting the company’s projection that liquid cooling will grow from approximately 15% of the thermal market to 30% by 2027, positioning Vertiv as a "primary beneficiary" of this expansion. Get exclusive access to detailed growth projections and valuation metrics for all companies involved through InvestingPro’s comprehensive research reports, covering 1,400+ top stocks with expert analysis and actionable insights.
Regarding Nvent, Citi pointed to the company’s approximately 20 years of experience in liquid cooling as an "early-mover competitive advantage," while noting its diversified end-market exposure across infrastructure (>40%), industrial (~30%), commercial/residential (~25%), and energy (
In other recent news, Amazon.com (NASDAQ:AMZN) has been the focus of several analyst updates and business developments. BofA Securities maintained its Buy rating on Amazon, emphasizing the potential of the Kuiper satellite project, which could capture a significant share of the global satellite communications market. The firm projects that Amazon could generate $7.1 billion in revenue by 2032 from this initiative. Meanwhile, Citizens JMP raised its price target for Amazon to $285, highlighting Amazon’s extensive reach and its ability to drive retail growth through faster delivery and data-driven advertising. The firm also pointed to artificial intelligence as a growth catalyst for Amazon Web Services (AWS).
Additionally, Amazon Web Services recently introduced custom cooling hardware for Nvidia (NASDAQ:NVDA)’s latest AI chips, allowing for efficient heat management without major data center renovations. This development includes new computing instances designed for advanced AI model development and deployment. TD Cowen also raised its price target for Amazon to $250, citing expected outperformance in revenue and operating income due to growth in AWS, advertising, and e-commerce segments. These updates reflect Amazon’s ongoing strategic initiatives and market positioning across various sectors.
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