Key Takeaways
- Vertiv fell 9% today after Democrats won Congress, dragging GE Vernova, Eaton and CoreWeave down too.
- Developers will still need Vertiv’s gear even if they pay more for power, so the selloff looks overdone.
- Analysts expect Vertiv’s normalized EPS to more than double by 2027, and Applied Digital has about $36 billion of signed leases.
- Vertiv’s February report and first 2027 guidance are the next read on demand.
Vertiv (VRT) fell 9% today after Democrats won Congress in Tuesday’s midterms, reviving fears that Washington could slow US data center construction.
The selling also hit gear makers GE Vernova (GEV) and Eaton (ETN), and CoreWeave (CRWV), which rents space from developers like Applied Digital (APLD).
Bernstein saw it coming
In a Monday note, Bernstein counted 244 gigawatts, about 56% of the US data center pipeline, as exposed to political risk, and expected an early drop if candidates who want tighter limits did well.
But Bernstein called that risk overstated: it expects developers to absorb more of the electricity and grid-upgrade costs, which it sees as relatively immaterial.
I agree. A developer paying more for power still has to fill the building with Vertiv’s gear.
Two of Bernstein’s other picks just showed that demand. Eaton, down 7%, reported record third-quarter sales of $8.9 billion yesterday, up 28%. GE Vernova, off 8%, posted a 96% organic jump in third-quarter orders last week and raised its guidance again.
TIKR tracks 30 analysts on Vertiv. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Vertiv, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Vertiv’s Analyst Ratings
Estimates keep climbing
Vertiv’s third-quarter revenue rose 61% to $4.31 billion, and analysts expect normalized EPS to more than double, from $4.20 in 2025 to $9.74 in 2027:
Vertiv (VRT): normalized EPS, actual and consensus estimates, $ per share, fiscal 2023-2028 (TIKR)
I see no reason for those estimates to fall on today’s news: Congress has no say over orders already in Vertiv’s backlog.
At Monday’s close, the stock traded at 24x forward earnings, against a five-year average of 27x and a May peak of 55x:
Vertiv (VRT): forward (NTM) P/E, last 5 years (TIKR)
Developers are still signing
Applied Digital has signed leases across five campuses worth about $36 billion of revenue over their initial terms. In its October results release, CEO Wes Cummins said “we view every new restriction elsewhere as making what we already own harder to replicate.”
CoreWeave, down 6%, reports its third quarter soon, the next read on whether AI clouds keep signing. Citi cut its target to $128 from $159 this morning but kept a Buy rating.
Washington can raise the bill
The way I see it, today’s drop is the first reaction Bernstein warned about, and it’s overdone.
Of course, if officials don’t soften, some of those 244 gigawatts may never get built. And with no orders data, Vertiv’s February report and first 2027 guidance are the next hard read on demand.
So what is Vertiv stock actually worth?
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