UBS reiterates Vertiv "Buy" rating: Concerns over Amazon AWS liquid cooling system competition are exaggerated
As one of the artificial intelligence (AI) stocks that Wall Street is paying attention to, UBS analyst Amit Mehrotra recently reiterated a "Buy" rating on Vertiv Holdings, with a target price of $135. UBS pointed out that after Amazon AWS announced the launch of its liquid cooling system for data centers last week, the stock price of liquid cooling equipment supplier Vertiv fell sharply. The analyst noted that although the liquid cooling system accounts for a small share of Vertiv's overall business, this segment is one of the main drivers of the company's growth, which is also the reason for the stock's poor performance, as the market is sensitive to such news. However, UBS believes this concern is misguided. UBS's field investigation shows that Amazon does not seem to be directly competing with Vertiv's liquid cooling products. This is because, to truly compete, Amazon would need to manufacture several components itself, such as coolant distribution units, radiators, manifolds, and pumps. The stock price reaction following Amazon's announcement of its liquid cooling system for data centers merely reflects investors' heightened sensitivity to potential competitive threats in the data center cooling market
According to the Zhitong Finance APP, as one of the artificial intelligence (AI) stocks attracting Wall Street's attention, UBS analyst Amit Mehrotra recently reaffirmed a "Buy" rating for Vertiv Holdings (VRT.US), with a target price of $135.
UBS pointed out that after Amazon (AMZN.US) AWS announced the launch of its liquid cooling system for data centers last week, the stock price of liquid cooling equipment supplier Vertiv fell sharply. Analysts noted that although the liquid cooling system accounts for a small share of Vertiv's overall business, this segment is one of the main drivers of the company's growth, which is also the reason for the stock's poor performance, as the market is quite sensitive to such news.
However, UBS believes this concern is misguided. UBS's field investigation shows that Amazon does not seem to be directly competing with Vertiv's liquid cooling products. This is because, to truly compete, Amazon would need to manufacture several components such as coolant distribution units, radiators, manifolds, and pumps on its own. The stock price reaction following Amazon's announcement of its liquid cooling system for data centers merely reflects investors' heightened sensitivity to potential competitive threats in the data center cooling market
