This Growth Stock Is Quietly Solving the AI Supercycle's Cooling Problem. Here's Why It Could Soar.
2026-09-29 15:07
•Dave Kovaleski •The Motley Fool
•••••• • Axe Cap view
AI Growth’s Cooling Bottleneck: Is Vertiv the Answer?
Vertiv’s push into AI data center cooling and power management offers a rare growth play in tech infrastructure that might excite investors, despite no direct JSE link.
Global tech growth, especially AI, faces a critical hurdle in power and cooling infrastructure. Vertiv Holdings, a niche leader in this space, reported impressive Q2 numbers with high revenue and earnings gains, backed by strategic acquisitions expanding their global footprint. Their forecast for 2026 signals a company growing faster than its valuation implies, with a forward price-to-earnings (P/E) ratio of 27 and a price/earnings to growth (PEG) ratio under 1, suggesting reasonable value. For South African investors, Vertiv's story matters more for the rand's reaction than for finding a local proxy. A stronger USD/ZAR might pressure local tech-linked counters but could also benefit exporters and miners. Vertiv is a reminder that the AI supercycle isn’t just in software—it’s in the unseen hardware making it possible. Watch the USD/ZAR closely. This view could stumble if AI growth disappoints or supply chain issues hit new highs. this is just our opinion and not financial advice
We would watch USD/ZAR closely and consider trimming growth-sensitive JSE counters like Naspers and Prosus if the rand weakens further on stronger USD. Vertiv itself is a ‘wait’ outside SA but interesting for global diversification.
- USD/ZAR
- Naspers
- Prosus
- AI demand slowdown
- US dollar strength impacting rand and JSE tech stocks
6/10
Vertiv Holdings, a leader in AI data center cooling and power management systems, has announced two major acquisitions (UtilityInnovation Group and King Environmental) to expand its global presence. The company reported strong Q2 results with 24% revenue growth and 53% earnings growth, raised 2026 guidance to 37% revenue growth and 60% adjusted earnings growth, and projects $2.4-2.6 billion in free cash flow for 2026. With a forward P/E of 27 and PEG below 1, analysts view the stock as reasonably valued despite a 55% year-to-date gain.
Our take is based on reporting first published by The Motley Fool.