Takeaways From Vertiv Investor Day; View LT Guide As Conservative

研报英文原文证据摘录

Takeaways From Vertiv Investor Day; View LT Guide As Conservative

ition in the data center to

140GW from 100GW on the back of data center infrastructure capex growth at ~18% annually

to 2030. This ultimately drove an upward revision in Vertiv's TAM from $62BN in 2025 to $75BN

today. Despite mgmt.'s revised content/MW addressable opportunity (~$3.25MM-$3.75MM

per MW) within the data center, we view this addressable market opportunity as conservative

when taking into account data center leasing activity observed over past 12-months (2Q25,

3Q25, 4Q25, 1Q26). In elaborating on complexity, mgmt. explained a theme shaping AI data

center design as being token maximization, where operators increasingly focus on efficiency in

electron-to-compute conversion and token maximization, which we ultimately see with further

reductions in data center PUEs. To address growing complexity, Vertiv touched on the ~120

product level innovations that it had brought to market over the past 18 months across all

product offerings. Following product innovation, mgmt. spoke to system and infrastructure

solutions like OneCore and SmartRun. With a target for FY30 cash conversion unchanged at

95-100%, expected deployable capital of ~$28.0B and a net leverage target of 1.0x-2.0x (up

from 0.5x at Y/E 2025), we see room for continued M&A and expect further acquisitions at

the system/infrastructure level to support the likes of OneCore and SmartRun. To this end,

mgmt. spoke to a healthy deal pipeline with a target ticket size of $750MM to $1B. Mgmt. lastly

earmarks $4B for dividends and buybacks. In addition to M&A, mgmt. continues to focus on

capacity expansion, notably calling out additions in South Carolina, Ohio, Pennsylvania, Europe,

India and Mexico over the last 12 months.