The largest technology companies, such as Alphabet (NASDAQ: GOOGL), dominate the data-center market. But some lesser-known players are making a big splash too.
One of them is Vertiv Holdings (NYSE: VRT), which provides thermal- and power-management products to data centers. The company says it has the highest market-share of data-center thermal management products.
Its thermal and power products include coolant distribution units, computer-room air conditioning (CRAC) units, power distribution units, and uninterruptible power supply.
Vertiv also sells racks, cabinets, closets, and aisles for the data centers. It has field engineers to help with product training, testing, and inspecting, as well as facility design, maintenance, and remote monitoring.
The company has a long history, with its flagship brand Liebert begun 80 years ago. It invented the first CRAC system in 1965. That allowed for exact temperature and humidity control in computer rooms.
Vertiv’s important products
Vertiv’s products play a key role for data centers. “Thermal and power management systems are essential for the safe and continuous operation of servers that host critical data for enterprises,” Morningstar analyst Nicholas Lieb wrote in a commentary. “The malfunctioning of a data center can be extremely destructive, and data center owners are risk averse when selecting suppliers.”
The company’s products aren’t expensive relative to the rest of a data center. Lieb estimates that Vertiv’s offerings make up less than 10% of a data center’s cost, and they stay in operation for many years.
“As a result, we suspect customers do not select thermal and power management products based solely on price, instead prioritizing factors such as performance, durability, and customer support,” he said. That’s a plus for Vertiv.
Lieb likes its intangible assets: brand equity, long-standing customer relationships (more than 20 years on average), and time-tested quality. “Industry participants note that Liebert’s reliability, longevity, and technical support are second to none, and that some of the equipment Liebert installed in the late 1970s is still in operation today.”
Potent partners, hefty earnings
Vertiv also works closely on its products with other dominant businesses, such as Nvidia (NASDAQ: NVDA), which provides important infrastructure for data centers, and Caterpillar (NYSE: CAT), whose equipment helps to build data centers.
All these factors have put a charge in Vertiv’s earnings. Its sales surged 30% in the first quarter from a year earlier, and operating profit jumped 51%. The company sees more success coming. It anticipates organic sales growth of 29%-31% for 2026 as a whole. And it expects earnings per share to soar 66%. The company’s strength helped it join the S&P 500 in March.
Not surprisingly, Vertiv’s stock has skyrocketed over the past few years. It has produced an annualized total return of 260% over the past year, 184% over three years and 72% over five years.
Of course these kinds of returns don’t last forever. There’s no guarantee that the boom in data centers will continue. So you might want to exercise caution if you’re going to jump into the stock. Lieb, who obviously likes the company, nonetheless puts fair value for the shares at $236, far below its recent level of $353.
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