Bank of America has stated that Vertiv, a data center servicer, is in a favorable position to experience gains as its margins recover from the artificial intelligence (AI) boom. Analyst Andrew Obin has upgraded Vertiv’s shares to buy from underperform and increased the price target by 54% to $40. This indicates the potential for an 18% increase from the closing price on Thursday. Obin believes that Vertiv will benefit from a margin recovery and improved free cash flow generation due to the adoption of AI in data centers. The growing demand for Vertiv’s Thermal Management products, driven by AI adoption, is expected to contribute to the company’s revenue growth. Additionally, the increasing use of graphics processing unit (GPU) chips in data centers for AI applications will generate more heat, creating a need for thermal management solutions. While this trend is not expected to have an immediate impact on revenue, it is anticipated to support revenue growth in 2024 and beyond. Vertiv’s strong portfolio in thermal management puts it ahead of its competitors in capitalizing on the AI industry. The stock has seen significant growth, gaining 2.3% on Friday and surging over 152% in 2023. Vertiv, formerly known as Emerson Network Power, was spun out of Emerson Electric in 2016 and went public again in a SPAC deal with Platinum Equity in early 2020.

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