The artificial intelligence industry is booming as the market turns back to the semiconductor, hardware and software companies driving this revolution. One industrial company I’m keeping an eye on — and one I’m not yet employed in — is Vertiv (VRT). The company provides liquid cooling systems for data centers supporting artificial intelligence. Liquid cooling technology will continue to gain momentum with large data centers operated by “hyperscalers” and the colocation market, which involves leasing server space to smaller companies. You can read a detailed explanation of how liquid cooling works and other related companies here. In the past three quarters, VRT’s earnings per share grew by 46%, 79% and 100% quarter-on-quarter respectively. During the same quarter, ESP beat consensus estimates by 17%, 20%, and 5%, respectively. Looking at the weekly chart, you can easily see the company’s massive rise from its 2022 lows. Technically, I think further upside is possible (possible?) targeting the confluence of Fibonacci forecast levels from $127 to $171. I know this is a wide range, but consider the percentage gains this stock has experienced over the past two years. I don’t have a position in the stock yet and would like to take advantage of any pullback from a test of all-time highs to establish a position in Inside Edge Capital’s growth portfolio. Turning to the daily chart, we see that the stock is pulling back from its all-time highs, with support expected at $103 to $95. I plan to initiate a position on a pullback to $105, buying approximately one-third of the expected position size, then add another third in the $100 area, and then on the breakout to new highs. -Todd Gordon, founder of Inside Edge Capital, LLC Disclosure: (At the time of publication, Gordon does not own VRT personally or through his wealth management firm, Inside Edge Capital, but that may change. Chart shown is from MotiveWave.) All Views The opinions expressed by CNBC Pro contributors are theirs alone and do not reflect the views of CNBC, NBC UNIVERSAL, its parent company or affiliates, and may have been previously disseminated by them on television, radio, online or other media. The above is subject to our Terms and Conditions and Privacy Policy. This content is for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not apply to your particular situation. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. Click here to view the complete disclaimer.
