Key Points
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Vertiv supplies liquid cooling solutions that let Nvidia’s powerful chips perform complex tasks without overheating.
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Market research firm Cleanview says that the largest operating data center is 750 megawatts, while all nine of the largest data centers in the works will exceed 5,000 megawatts.
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After a new data center has liquid cooling systems installed, it becomes a source of recurring maintenance revenues.
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AI chips are fueling the latest technology. For example, chatbots, autonomous vehicles, and humanoid robots all need powerful parallel processors that can process massive amounts of data rapidly so they can respond to questions or what’s happening in the environment around them in real-time.
However, when they’re working, those AI chips get extremely hot, which can result in reduced performance, component damage, shortened chip lifespans, and even fires. That’s why liquid cooling systems are a part of every data center. They prevent the chips from overheating, and those systems are as vital to the AI boom as the chips themselves.
Vertiv (NYSE: VRT) is among the leaders in data center liquid cooling. Its stock is up by more than 60% year to date, soundly outperforming the S&P 500 over that period. Its key role in AI infrastructure suggests that its momentum could be sustainable.
More data centers increase the demand for liquid cooling solutions
Vertiv’s revenue growth will depend on the success of Nvidia and the continuation of the data center build-out. The leading chipmaker’s 85% year-over-year revenue growth in its fiscal 2027 first quarter shows that chips are still in high demand. Each of those chips will need liquid cooling to actually function.
The data center narrative is even more compelling. Market intelligence company Cleanview asserts that there are 1,214 large-scale data centers operating in the U.S., with another 1,714 data centers planned. The site also lists 55,509 megawatts in operating capacity, compared to 369,555 megawatts in planned capacity.
Iren‘s Childress site tops the list as the largest operating data center in the U.S., at 750 megawatts. Meanwhile, the nine largest data centers in development will all exceed 5 gigawatts. That indicates just how huge the market is for liquid cooling solutions of the type that Vertiv provides.
Vertiv’s pricing power is growing
Naturally, all of the upcoming data centers have boosted demand for Vertiv’s services, which has given it strong pricing power. The company reported 30% year-over-year revenue growth in the first quarter while more than doubling its net income.
Vertiv’s net profit margins comfortably sit in the double digits and may continue to inch higher if current growth rate trends prevail. Given the soaring demand for new data center capacity, that’s likely. However, Vertiv also benefits since its services are required to maintain the liquid cooling systems it installs. Every new data center site represents a potential customer and a potential recurring revenue source.
In its Q1 report, management did not mention the company’s backlog, but Vertiv wrapped up 2025 with a book-to-bill backlog of $15 billion, which was a 109% year-over-year increase. And Vertiv recently opened a new manufacturing facility in Malaysia so it can serve more customers, evidence that it expects AI demand to keep growing.
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Marc Guberti has positions in Iren. The Motley Fool has positions in and recommends Nvidia and Vertiv. The Motley Fool has a disclosure policy.
