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Thursday's Exclusive Article Vertiv's $15 Billion Backlog Is the Loudest AI Signal in 2026By Jeffrey Neal Johnson. Date Posted: 2/18/2026. 
Key Points - The company reported a historic surge in its order backlog that provides exceptional visibility into revenue growth for multiple future years.
- Strategic acquisitions and partnerships with leading chip manufacturers have solidified a dominant position in the liquid cooling market.
- Recent government policy exemptions for large data centers effectively create a regulatory advantage that incentivizes domestic expansion.
- Special Report: This makes me furious (From The Oxford Club)
 For the past two years, the artificial intelligence (AI) investment narrative has focused almost exclusively on silicon. Investors constantly asked, "Who makes the chips?" and the answer was usually NVIDIA (NASDAQ: NVDA). However, as 2026 unfolds, the bottleneck in the AI revolution is shifting. It is no longer just about acquiring processors; it is about the physics of keeping them running. As AI data centers grow larger and chips run hotter, the main constraints have shifted to power delivery and thermal management. This change has crowned Vertiv Holdings Co. (NYSE: VRT) as the "utility company" of the AI era. Without Vertiv's high-density cooling and power systems, the latest generation of high-performance chips cannot function at scale. Following a strong fourth-quarter report that sent shares near all-time highs of roughly $243, Vertiv has shown it is not just a manufacturing stock but a structural necessity for the digital economy. A $15 Billion Signal for Future Growth On Feb. 11, 2026, Vertiv delivered what Wall Street calls a beat-and-raise quarter, fundamentally resetting expectations for the company's growth trajectory. The numbers tell a story of accelerating demand that is decoupling from broader, slower-moving industrial trends. In the fourth quarter of 2025, Vertiv reported net sales of $2.88 billion, an organic increase of 19% from the same period a year earlier. Profitability was even more impressive: Adjusted Earnings Per Share (EPS) hit $1.36, beating analyst consensus of $1.29. The company also generated $910 million in adjusted free cash flow, providing ample resources to reinvest in factories and the supply chain. The Mic Drop Metric: A $15 Billion Backlog Matters While revenue growth was strong, the standout metric was the order backlog. Vertiv ended 2025 with a backlog of $15 billion, a staggering 109% increase year over year. This figure matters because it represents contractually secured demand. Unlike consumer tech companies that rely on quarterly sales trends, a backlog of this magnitude means a significant portion of Vertiv's 2026 and 2027 revenue is already locked in. That level of visibility is rare in the industrial sector. Management also issued bullish guidance for 2026, projecting revenue between $13.25 billion and $13.75 billion, with adjusted EPS expected to rise to $5.97–$6.07. This projected 43% increase in earnings effectively pulls the company's long-term financial targets forward by nearly two years. Engineering the Moat: How Vertiv Protects Its Lead The driving force behind Vertiv's backlog is a fundamental problem with physics: air is no longer enough. Traditional data centers cool servers by blowing cold air through racks. Modern AI clusters, like those using NVIDIA's Blackwell chips, are pushing power densities to 100 kilowatts (kW) per rack and beyond. At those levels, air simply cannot transfer heat fast enough to prevent hardware failure. Vertiv has positioned itself as a market leader in the transition to liquid cooling, including Direct-to-Chip technology where fluid is pumped through metal plates attached directly to GPUs. That engineering expertise creates a technological moat, protecting Vertiv from commodity competitors that lack the pedigree to manage high-pressure fluid loops inside expensive server racks. To deepen this moat, Vertiv completed the $1 billion acquisition of PurgeRite in December 2025. The deal represents a classic razor-and-blade strategy: Vertiv sells the hardware (cooling units), and PurgeRite provides the specialized services to flush, filter, and maintain complex fluid chemistry. By owning the service layer, Vertiv creates a high-margin, recurring revenue stream that persists for the life of the data center. Additionally, the company is collaborating with NVIDIA to develop an 800-volt DC power architecture, scheduled for release in the second half of 2026. That product launch is timed to coincide with NVIDIA's next-generation Rubin platform. By integrating its power systems into the blueprints for future AI factories, Vertiv positions itself as the default infrastructure partner for the world's largest technology companies. Why Trade Wars Won't Stop the Build-Out Investors have reasonably expressed concern about the new 25% Section 232 tariffs on semiconductors, imposed in January 2026. Typically, trade barriers increase costs and dampen demand. However, Vertiv benefits from a regulatory carve-out that many analysts initially overlooked. The presidential proclamation imposing these tariffs includes an important exemption: semiconductor imports destined for U.S. data centers with loads greater than 100 megawatts (MW) are exempt from the duty. That policy actively incentivizes hyperscalers to build massive AI clusters inside the United States. Since the Americas region is Vertiv's strongest market—posting 50% sales growth in Q4—this policy effectively creates a regulatory moat around its core customer base, shielding them from cost inflation. Why Vertiv Commands a Higher Multiple Vertiv's strength becomes clearer when compared with peers such as Eaton (NYSE: ETN). While Eaton is a high-quality industrial firm, it recently missed revenue estimates due to exposure to cyclical sectors such as automotive and aerospace. Vertiv, by contrast, is a pure-play on data centers and captures the full velocity of the AI infrastructure boom without the drag of slower-growing legacy industries. Trading at roughly 40 times forward earnings, Vertiv commands a premium. But context matters: when adjusted for growth using the PEG ratio (Price/Earnings-to-Growth), the stock appears fairly valued. With earnings projected to grow about 43% in 2026, the PEG ratio sits near 1.0, suggesting investors are paying a reasonable price for elite growth. Additionally, S&P Global Ratings recently upgraded Vertiv to investment grade (BBB-), a move that lowers the company's cost of capital and broadens its appeal to institutional investors. The Toll Booth for the AI Age Vertiv has successfully moved from cyclical industrial manufacturer to secular growth compounder. The shift in the AI bottleneck from silicon availability to physical infrastructure availability has placed the company in an enviable position. With a $15 billion backlog, a protected domestic market, and a strategic grip on liquid cooling and high-voltage power, Vertiv is becoming the toll booth for the AI supercycle. Customer concentration among the Magnificent Seven remains a risk to monitor, but the company's execution suggests that as the arms race for compute power continues, Vertiv will be the company keeping the lights on and the temperatures down.
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