Vertiv stock initiated with Sell rating by GLJ Research on AI bubble concerns

Investing.com - GLJ Research initiated coverage of Vertiv Holdings Co. (NYSE:VRT), now a $51.7 billion market cap company, with a Sell rating and a price target of $112.00, representing a potential 17% downside from current levels. According to InvestingPro data, the stock trades at a P/E ratio of 63, reflecting premium valuations.

The research firm acknowledged that Vertiv has experienced a justified multi-year re-rating driven by artificial intelligence infrastructure tailwinds, with impressive revenue growth of 26.3% and a strong financial health score of GREAT, but expressed concerns that the current stock price already reflects peak cycle economics for 2027-2028.

GLJ Research highlighted several unanswered questions surrounding Vertiv’s business, including competitive intensity, capacity friction, and true pricing power, which collectively create a negative risk/reward profile for investors.

The firm emphasized that Vertiv’s current valuation "demands perfection beyond execution," suggesting the market has priced in flawless performance that may be difficult to achieve.

Despite the bearish outlook, GLJ Research noted that conversations with data center vendors and architects confirm that Vertiv brands including Liebert and Geist continue to execute toward higher backlog in what remains a seller’s market for data center electrical equipment.

In other recent news, Vertiv Holdings Co reported a robust second quarter for 2025, significantly surpassing analyst expectations. The company posted earnings per share of $0.95, exceeding the projected $0.83, and reported revenue of $2.64 billion, which was above the anticipated $2.35 billion. This strong performance led to increased investor confidence and subsequent analyst actions. Mizuho (NYSE:MFG) raised its price target for Vertiv to $165 from $150, attributing the adjustment to the company’s strong growth, particularly in the Americas, where organic growth reached 43%. Meanwhile, Oppenheimer also increased its price target to $151 from $140, highlighting Vertiv’s performance that exceeded consensus expectations and its optimistic guidance for the latter half of the year. Both firms maintained an Outperform rating on the stock. These developments indicate a positive outlook for Vertiv, driven by its recent financial achievements and growth prospects.

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