The Overlooked AI Stock Poised to Outperform Nvidia and Palantir
2026-10-06 07:35
•Marc Guberti •The Motley Fool
••••• ••• Axe Cap view
Vertiv: The Overlooked AI Infrastructure Bet Beyond Nvidia
Liquid cooling specialist Vertiv stands out as a critical enabler of AI data centres with strong growth and attractive valuation.
Nvidia grabs most headlines in AI hardware, but few consider how AI chips generate intense heat requiring advanced cooling solutions. Vertiv specializes in liquid cooling systems that air cooling just can’t handle. Its 24% revenue growth and bullish 31% guidance this year signal strong demand as data centres race to keep GPUs running efficiently. Trading at a forward P/E of 28 and a PEG under 1, Vertiv looks reasonably priced given its market leadership and Nvidia partnership. South African investors won’t find a direct JSE equivalent, so the best proxy here is to watch USD/ZAR – a weaker rand would raise the cost of importing high-tech infrastructure. Given global interest in AI expansion, Vertiv may outperform software and chip names like Palantir or Nvidia in the next year. Still, if Nvidia’s AI demand stumbles or liquid cooling tech sees a breakthrough alternative, Vertiv’s growth could disappoint. this is just our opinion and not financial advice
Watch USD/ZAR closely as a proxy means to capture AI infrastructure exposure; consider selectively buying companies benefiting from AI growth themes but with an eye on valuation and sector risks.
- USD/ZAR
- Vertiv (VRT)
- AI demand slowdown impacting hardware upgrades
- Technological breakthroughs reducing reliance on liquid cooling
5/10
Vertiv, a liquid cooling specialist, is positioned as a critical AI infrastructure play that may outperform Nvidia and Palantir. As AI chips generate excessive heat that air cooling cannot manage, Vertiv's liquid cooling systems have become essential for data centers. The company reported 24% YoY revenue growth in Q2 with management guidance for 31% full-year growth, while trading at a relatively attractive 1-year forward P/E of 28 and a PEG ratio of 0.84.
Our take is based on reporting first published by The Motley Fool.