By Mackenzie Tatananni

Volatility isn't always viewed favorably by investors, but for Vertiv Holdings, a critical infrastructure provider to data centers, recent swings in the stock price present what one firm is calling an "attractive entry point."

There's a multitude of ways to play the artificial-intelligence theme that defined 2025, and Vertiv, which makes cooling and power equipment for data centers, is one of them. Barclays analyst Julian Mitchell upgraded shares to Overweight from Equal Weight and raised his price target to $200 from $181.

The stock rose 7.8% to $174.58 on Friday.

"While we have not been among the datacenter capex theme's biggest cheerleaders, we think the recent volatility in the stock has created an attractive entry point," Mitchell wrote.

Good timing: The analyst believes Vertiv is poised to rake in gains in 2026, see substantial upside to Wall Street's earnings estimates, as it plays catch-up with other Overweight-rated AI names like GE Vernova and nVent Electric in the new year.

Barclays expects Vertiv to end 2026 with earnings of $5.68 a share, higher than the $5.29 consensus estimate among analysts surveyed by FactSet. Mitchell posited that "the company tends to set a conservative guidance, allowing scope for 'beat and raise' in the quarters ahead."

Around 80% of Vertiv's sales are driven by data-center clients, giving it the highest exposure out of all the stocks in the firm's coverage. Mitchell believes concerns over a deceleration in data-center spending are overblown, and projected deceleration in Vertiv's sales "is too sharp."

While Wall Street is modeling a slowdown in hyperscaler capex in 2026, "these estimates have continuously been sharply revised higher," Mitchell wrote, noting that overall hyperscaler capex "is set to continue seeing high growth" in the coming year.

This will undoubtedly be a tailwind for Vertiv, which Mitchell believes is still in the early innings. Within the broader data center equipment, liquid cooling -- Vertiv's specialty -- "is one of the only product categories that is still somewhat 'early' in its up-cycle," he wrote.

He isn't the only cheerleader, seeing as attitudes on Wall Street are overwhelmingly positive. Of 32 firms tracked by FactSet, 23 rate Vertiv at Buy or Overweight. Eight rate the stock at Hold, and just one -- notoriously bearish GLJ Research -- at Sell.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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January 02, 2026 09:56 ET (14:56 GMT)

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