Under the AI boom, Vertiv, born out of SPAC, has a staggering return rate of 555%! Outperforming the "King of Understanding Concept Stocks"

According to the Zhitong Finance and Economics APP, Vertiv Holdings (VRT.US), which is dedicated to developing advanced liquid cooling and hybrid cooling solutions for AI data centers, has become the best-performing US-listed company to go public through a Special Purpose Acquisition Company (SPAC). With investors' excitement about artificial intelligence, Vertiv Holdings' total market value has exceeded $30 billion, significantly outperforming one of the milestones in the de-SPAC surge set by former US President Donald Trump's media startup company, Trump Media Technology Group (DJT.US).

Statistics compiled by institutions show that this company, focusing on the field of artificial intelligence infrastructure, went public in 2020 after merging with a SPAC supported by Goldman Sachs. Its stock price has delivered an astonishing return of 555% since going public. Fueled by the global trend of AI deployment, Vertiv Holdings has seen a surge of 75% from 2024 to date. Even before the SPAC boom began in the era of the COVID-19 pandemic, the company's stock price had been soaring since its first day of listing.

This remarkable surge stands out prominently among the significant losses incurred by SPAC investors, with a return rate exceeding 8 times that of the S&P 500 index. Among the companies merged with SPACs, the "Trump concept stock" deeply associated with former US President Trump - Trump Media Technology Group (DJT.US) - is undoubtedly the most watched company. The company almost outperformed Vertiv in stock price performance after the SPAC merger, but has since almost entirely retraced its gains.

Wall Street analysts are generally optimistic that the massive investment scale of global enterprises in artificial intelligence technology will support the continuous expansion of data center capacity. This is a significant positive for Vertiv, as most of its revenue comes from sales of power management for data centers and products such as IT liquid cooling and hybrid cooling systems used in data centers worldwide.

Currently, Vertiv is focusing on developing advanced liquid cooling solutions for AI data centers. More importantly, publicly available information shows that Vertiv is collaborating with AI chip leader NVIDIA (NVDA.US) to develop advanced liquid cooling solutions for the next generation of NVIDIA AI GPU-accelerated data centers. Vertiv's high-density power and cooling solutions are designed to support NVIDIA's next-generation GPUs to run the most computationally intensive AI workloads with optimal performance and high availability securely According to data compiled by institutions, Wall Street analysts have given Vertiv 12 "buy" ratings, 1 "hold" rating, and no "sell" ratings. However, based on the average analyst target price, the company's stock price is expected to increase by less than 1% in the next year.

Analyst Noah Kaye from Oppenheimer & Co. has a more aggressive target price for Vertiv, rating the stock as "outperforming the market" with a target price of $96 per share (Vertiv closed at $84.15 on Monday). In a report on April 4th, analyst Kaye emphasized the "big trend of artificial intelligence" expanding the potential market for AI data center capacity, and projected that by 2026, Vertiv's high-density computing market alone will reach $25 billion.

Despite attracting attention from Wall Street and meme stock traders, Trump Media & Technology Group's stock price has dropped 36% from its peak to $37.17 per share, causing it to fall from the list of top-performing so-called "de-SPAC" companies. On March 26th, the stock of this social media startup company, touted as the "king of understanding concept stocks," reached an intraday high of $79.38, making it the second-best performing de-SPAC market stock at the time, trailing Vertiv by about 4%. However, this decline has pushed it to the bottom of the list.

Companies like Vertiv, DraftKings Inc., and Symbotic that stand out in terms of stock price performance among companies that went public through SPAC mergers are in the minority. Data compiled by institutions shows that out of nearly 500 SPAC transactions completed since 2019, over one-fifth of the targets are currently trading below $1 per share, with declines exceeding 90%.

For investors in Vertiv, excitement in the rapidly growing AI data center market is crucial. The global trend of enterprises deploying artificial intelligence has significantly increased Wall Street's enthusiasm for investing in Vertiv. Wall Street expects that as the demand for stronger computing power at the application end continues to grow, sales of data center infrastructure will also increase significantly.

Analyst Amit Daryanani from Evercore ISI wrote that among companies in the physical infrastructure of data centers, Vertiv "may be the infrastructure company that benefits the most from the tailwind of artificial intelligence." He put forward an extremely optimistic bullish view, suggesting that the stock could soar to $150. Daryanani stated that for the company to rebound that far, it would need to achieve strong operating profit margins and continue to benefit from the transition from air-cooled systems to liquid-cooled systems in the GPU equipment system at the computing power end