Hot AI Chips Demand Cool Solutions

The latest advancements in artificial intelligence, from chatbots to autonomous vehicles, rely on powerful chips that generate substantial heat. This excessive heat can lead to performance degradation, component damage, and reduced chip lifespans.

To combat this, liquid cooling systems are indispensable in data centers, ensuring AI chips operate optimally. Vertiv (NYSE: VRT) is a prominent provider of these critical cooling solutions. As of 2026, its stock performance has significantly outpaced the S&P 500, with year-to-date gains exceeding 60%.

The company's growth is closely tied to the continued success of AI chip manufacturers like Nvidia, which reported substantial year-over-year revenue growth in its fiscal 2027 first quarter. Each AI chip deployed requires effective cooling.

Furthermore, the U.S. is experiencing a significant build-out of data centers. With over 1,200 large-scale data centers currently operating and more than 1,700 planned, the demand for liquid cooling infrastructure is set to surge. Planned data center capacity is vastly expanding, underscoring the market's immense scale for solutions like Vertiv's.

Vertiv is experiencing strong pricing power due to this increased demand. The company reported robust year-over-year revenue growth and more than doubled its net income in the first quarter of 2026. Its net profit margins are in the double digits and are expected to rise.

This growth is further bolstered by recurring revenue streams from the maintenance of installed liquid cooling systems, making each new data center a long-term customer.