Even as investors sour on AI spending, demand for data-center infrastructure continues to accelerate. That's good news for Vertiv Holdings.

TD Cowen analysts led by Michael Elias gave the stock a fresh vote of confidence on Monday as they reiterated a Buy rating and raised their price target by $1 to $211.

Shares have already seen double-digit gains this year, spiking as high as $199.27 on Oct. 29, although they have slightly retreated from those levels. On Monday, the stock was trading above its 50-day moving average of $171.12, rising 1.3% to $182.13. The S&P 500 was down 0.2%.

Vertiv is a major manufacturer of data-center infrastructure such as the liquid cooling systems that absorb heat from servers. TD Cowen named the stock a "Top Pick" earlier this year, arguing that the hot AI play had room to run and many on Wall Street were failing to appreciate it.

You can't blame investors for having doubts. Artificial-intelligence spending remains a hot-button issue on Wall Street. One of Vertiv's technology providers, Oracle, has found itself in the crosshairs due to expectations that it will borrow more money to finance its aggressive data-center buildout.

Likewise, Vertiv has been spending more in a bid to expand its production capacity and capitalize on "unprecedented data center growth." The company guided for capital expenditures in the neighborhood of $250 million in 2025, "with a further expansion in 2026 to support anticipated significant revenue growth."

As of the end of 2024, Vertiv's free cash flow position had improved to $1.2 billion from $780 million a year earlier while long-term debt was largely unchanged at $2.9 billion.

Even as investor sentiment has curdled, TD Cowen believes a sustained appetite for data-center spending could cause Vertiv's customer orders to accelerate as soon as the fourth quarter.

The firm noted that U.S. data-center leasing had spiked to 7.4 gigawatts in the third quarter, versus roughly 2 gigawatts for the past two quarters, driven largely by Oracle and OpenAI. The firm cited a further "acceleration in demand" from Alphabet-owned Google and Meta Platforms, "which we view positively as it provides additional customer diversity."

Despite the recent market volatility, "our latest channel checks continue to indicate accelerating demand," TD Cowen continued. The firm is tracking an active U.S. data center leasing pipeline of around 11 gigawatts.

TD Cowen analysts aren't only ones cheering Vertiv on. Of 31 firms tracked by FactSet, 22 rate Vertiv at Buy or Overweight. Seven rate it at Hold, and two at Sell or the equivalent.

Vertiv shares have surged nearly 60% this year, outstripping a 16% gain for the benchmark S&P 500 and a 21% gain for the tech-heavy Nasdaq Composite. The infrastructure provider went public in 2020 through a reverse merger with GS Acquisition Holdings, a special-purpose acquisition company.