Buy These 2 Boring Industrial Infrastructure Stocks This Month
Investors should consider buying two industrial infrastructure stocks, Vertiv Holdings and Fluor, due to their potential for above-average results.
Intelligence analysis by Llama
Two industrial stocks, Vertiv Holdings and Fluor, are poised for above-average results due to their involvement in the growing artificial intelligence and data center industries.
Imagine you're building a really big computer to help with artificial intelligence. You need special power supplies and cooling systems to keep it from getting too hot. Two companies, Vertiv and Fluor, make these things and are doing well because of it.
Analysis
A $60B Vote of Confidence
Vertiv Holdings' recent Q1 revenue growth of 30% year over year to $2.65 billion is a testament to the company's position in the data center infrastructure market. The company's CEO, Giordano Albertazzi, notes that customers are prioritizing optimized design, deployment speed, and operational efficiency, which is driving the growth in the data center cooling market. This market is expected to grow at an average annual pace of nearly 12% through 2035, according to Precedence Research. Vertiv's partnerships with companies like Nvidia to develop 800-volt DC platforms and its liquid-cooling tech that reduces cooling energy consumption by up to 80% make it well-positioned to win a significant share of this growth.
Why Cursor?
Fluor's business in designing and building semiconductor manufacturing facilities, chemical factories, nuclear power plants, airport infrastructure, and more may seem complicated and unpredictable. However, the company's size and experience allow it to navigate these challenges. Since 2023, Fluor has successfully fought to make more of its projects reimbursable at its cost rather than using flat-price contracts. This should smooth out bottom-line results for the company and its shareholders. Analysts are calling for 7.5% sales growth next year, which should boost per-share profits by 27%.
The Road Ahead
Both Vertiv and Fluor are poised for growth in the coming years. Vertiv's data center cooling market is expected to grow at an average annual pace of nearly 12% through 2035, while Fluor's revenue is expected to grow by 7.5% next year. These stocks represent opportunities for investors to get in on the ground floor of these growing industries.
Key points
- Vertiv Holdings' Q1 revenue growth of 30% year over year to $2.65 billion is a testament to the company's position in the data center infrastructure market.
- Fluor's business in designing and building semiconductor manufacturing facilities, chemical factories, nuclear power plants, airport infrastructure, and more may seem complicated and unpredictable.
- Analysts are calling for 7.5% sales growth next year for Fluor, which should boost per-share profits by 27%.
If Vertiv and Fluor continue to grow at their current rates, investors may see significant returns in the coming years. Vertiv's data center cooling market is expected to grow at an average annual pace of nearly 12% through 2035, while Fluor's revenue is expected to grow by 7.5% next year.
However, there are risks associated with investing in these companies. Vertiv's growth may be slowed by competition from other companies, while Fluor's revenue growth may be impacted by changes in government regulations or economic downturns.