Riding the AI Infrastructure Boom: Vertiv and Eaton as Key Players in Data Center Growth

Artificial intelligence (AI) has been a hot topic in the market for some time now, with investors seeking ways to gain exposure to this technology. The AI theme has been one of the strongest in recent years, with many stocks benefiting from the frenzy. For those interested in gaining exposure to AI through the data center angle, two stocks to consider are Vertiv (VRT) and Eaton (ETN).

Vertiv is a company that provides services for data centers, communication networks, and commercial and industrial facilities with a portfolio of power, cooling, and IT infrastructure solutions and services. Analysts have increased their EPS expectations over the past year due to bullish commentary, with the current Zacks Consensus EPS estimate suggesting 25% YoY growth. Vertiv is expected to see 18% YoY sales growth in its current fiscal year, with double-digit percentage sales growth reported in each of its past four quarters. The company has also upped its current year sales guidance following the release of its Q1 results, which showed 13% YoY growth and 21% sequential growth in orders.

Eaton is an intelligent power management company that provides products for the data center, utility, industrial, commercial, machine building, residential, aerospace, and mobility markets. The company's latest set of results was highly positive, with record Q1 adjusted EPS of $2.72 (up 13% YoY), record Q1 sales of $6.4 billion (up 7% YoY), and record segment margins of 23.9% (80 bp increase YoY). ETN shares also offer a great opportunity for those seeking income, with a 7% five-year annualized dividend growth rate. The company has paid a dividend on its shares every year since 1923.

Both VRT and ETN deserve consideration for those interested in the AI frenzy due to their involvement within data centers. As AI continues to be a driving force in productivity and operational efficiencies for businesses, these two companies are well-positioned to capitalize on this trend.

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