Vertiv Holdings shares surged following the company’s fourth-quarter earnings report, climbing 17% by Thursday’s close as investors embraced strong financial results and guidance. The data center infrastructure provider reported robust demand for its cooling solutions and power management systems, driven by the ongoing artificial intelligence data center buildout. The company’s backlog more than doubled, signaling continued momentum in the AI infrastructure sector despite broader market concerns about the technology’s growth trajectory.
According to the earnings report released Wednesday, Vertiv’s order backlog jumped 109% from $7.8 billion at the end of 2024 to $15 billion by year-end 2025. The New York Stock Exchange-listed company reported annual sales of $10.2 billion for 2025, representing a 28% increase year-over-year. Operating profit climbed 35% to $668 million, while free cash flow surged 66% to $1.8 billion, demonstrating the company’s ability to convert revenue growth into cash.
Strong AI Data Center Demand Drives Results
The exceptional performance reflects Vertiv’s position as a critical supplier to the AI infrastructure boom. The company provides essential equipment including cooling systems, energy storage solutions, and monitoring technology that data centers require to operate efficiently. These pick-and-shovel investments in AI infrastructure have proven lucrative as tech giants continue expanding their computational capacity.
Management attributes the growth to accelerating data center construction and the specialized requirements of AI workloads. These advanced computing systems generate significantly more heat than traditional servers, creating increased demand for sophisticated cooling solutions. Additionally, the need for uninterrupted power supply systems has grown as AI applications require continuous operation.
Backlog Signals Sustained Growth Trajectory
The doubling of Vertiv’s backlog represents the most significant indicator of future performance, according to financial analysts. This $15 billion in future orders provides visibility into revenue streams and supports the company’s optimistic 2026 outlook. However, the timeline for converting backlog into recognized revenue remains subject to project completion schedules and supply chain conditions.
For 2026, Vertiv management forecasts organic net sales growth between 27% and 29%. This guidance suggests confidence that the AI infrastructure buildout will continue at a rapid pace throughout the coming year. The substantial backlog essentially pre-validates much of this projection, reducing execution risk compared to companies dependent on near-term order generation.
Market Concerns About AI Growth Persist
Meanwhile, broader investor sentiment regarding artificial intelligence investments has shown signs of uncertainty in recent months. Questions about the return on investment for massive AI infrastructure spending have created volatility in technology stocks. Some market participants worry that the current pace of data center construction may outstrip near-term demand for AI services.
In contrast, Vertiv’s order book suggests that infrastructure providers continue to see strong commitment from hyperscale data center operators and cloud service providers. The company’s customer base includes major technology firms that are proceeding with planned expansions despite market skepticism. This disconnect between market sentiment and actual ordering behavior may present opportunities for investors willing to look beyond short-term volatility.
Financial Strength Supports Future Investments
The significant improvement in free cash flow generation positions Vertiv to invest in capacity expansion and research and development. The 66% increase to $1.8 billion provides financial flexibility to meet growing customer demand while potentially returning capital to shareholders. The company has not announced specific plans for cash deployment beyond operational requirements.
Supply chain management remains critical as Vertiv scales production to meet backlog obligations. The company must balance rapid growth with quality control and timely delivery to maintain customer relationships. Any disruptions to component availability or manufacturing capacity could impact the ability to convert backlog into revenue on schedule.
Investors will be watching Vertiv’s quarterly progress throughout 2026 to confirm whether the company can sustain its growth rates and successfully convert the substantial backlog into revenue. The next earnings report should provide additional clarity on execution against the ambitious sales growth targets and any changes to the competitive landscape in AI infrastructure equipment.
