The Smartest Data Center/AI Stocks Are Now Buy $2,000

Suppose you think of investing relatively small amounts of money into stocks in a diversified portfolio and want to spread risks while gaining upward exposure to exciting growth themes. In this case, the AI/data center space is a good starting point. verb (NYSE: VRT) and nvent (NYSE:NVT) When considering how to profit from the thriving demand for artificial intelligence (AI) applications and data center spending, it may not be thought of. However, this observation highlights the opportunity to identify investors' profits. All three provide critical solutions and services for data centers and represent hidden ways of playing the subject.

Vertiv provides digital infrastructure for data centers and communication networks, with products including power management, switching equipment, thermal management, and monitoring and control infrastructure. Emerson Electric The company sold the company to Platinum Equity, a private equity firm of Tom Gores, which brought the company to the market in 2020. Its executive chairman is former long-term CEO HoneywellDavid Cotter.

The company found itself reason to benefit from growing interest in data center investments to support application growth, a backlog of Vertiv’s thriving. This growth continued until the first quarter, with the backlog increasing by 10% from the end of 2024.

Data source: Vertiv demo. Author chart.

Its strength in orders and backlogs encouraged management to increase the midpoint of its full-year organic revenue growth forecast to its most recent first-quarter yield estimate, which increased by 18%.

However, due to uncertainty about tariffs, management maintains the midpoint of its profit margins, profit and cash flow guidance. Nevertheless, Vertiv management and Wall Street analysts expect $1.3 billion in free cash flow (FCF) in 2025, and Wall Street is expected to earn $1.65 billion and $1.79 billion on the FCF in 2026 and 2027.

With its current market cap of $36.1 billion, Vertiv will be 28 times and 22.5 times the FCF transactions in 2026. This is not cheap, but it would be a good value if the trend to accelerate AI/data center demand continues.

Servers in the data center.
Image source: Getty Images.

Nvent provides electrical connection and protection solutions for a wide range of industrial, commercial and residential customers. These ultimate markets include data centers and electricity utilities that generate energy to power them. Management has made a conscious decision to increase company exposure to these attractive end markets by divesting its thermal management business in January and then divesting the company’s hot management business for $975 million.

The deal means that infrastructure (data solutions and electricity utilities) now accounts for 40% of its portfolio. This is also the fastest growing final market for Nvent. CEO Beth Wozniak noted that its data solutions organic orders rose at a strong double-digit rate in the first quarter, while the middle digits in the rest of the business grew. Ultimately, the intensity of the data solution order leads to the growth of the medium-term organic order in Q1.

Just like Vertiv, Nvent's excellent first quarter encouraged management to improve its full-year sales guidance to boost organic growth by 5% to 7%, compared to previous estimates of 4% to 6%. However, unlike Vertiv, Nvent's management increased its full-year revenue growth guidance to 22% to 26%, while earlier estimates were 20% to 24%. Additionally, these forecasts include the assumption of a negative tariff effect of $120 million.

Wozniak made it clear that the electricity utility and data centers were in her statement: “When we look at data solutions and electricity utility companies, this is where we see this growth accelerating.”

Data center spending remains strong despite concerns that data center spending will slow into earnings season and tariffs may have an impact on business confidence in April.

Wall Street analysts shared this view, seeing Nvent report earnings of $3.09 and $3.46 per share for 2025 and 2026, with FCF revenue of $446 million and $561 million. These estimates are less than 20 times in 2025, and 24 times in FCF and 17.7 times in 2025. These are attractive multiples and have the potential to rise, and Nvent is a great stock to buy.

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Lee Samaha has no position in any of the stocks mentioned. Motley fool has a place and recommends Emerson Electric and Nvidia. Motley Fool has a disclosure policy.

Currently, the smartest data center/AI stock was originally published by Motley Fool