Vertiv Holdings Co. experienced a dramatic after-hours rally, with its stock climbing approximately 24% following the release of its fourth-quarter financial results and a significantly upgraded outlook for 2026. The company, a key supplier of power and cooling infrastructure for data centers, is benefiting from surging demand linked to artificial intelligence and cloud computing expansion.
Financial Performance and Key Metrics
The company reported fourth-quarter net sales of $2.88 billion, a 23% increase year-over-year. Adjusted earnings per share came in at $1.36. The most striking figure was a 252% year-over-year surge in organic orders, which propelled the company's order backlog to a record $15.0 billion. The book-to-bill ratio, a critical indicator of demand versus supply, reached approximately 2.9x, signaling that new orders are coming in nearly three times faster than the company can fulfill them.
Forward Guidance and Market Reaction
Management provided an optimistic forecast for 2026, projecting net sales in the range of $13.25 billion to $13.75 billion. Adjusted diluted earnings per share are expected to land between $5.97 and $6.07, surpassing consensus analyst estimates. For the current quarter, the company anticipates adjusted EPS of $0.95 to $1.01. This bullish outlook, particularly against the backdrop of the massive order growth, fueled the sharp positive move in the stock price.
On the earnings call, Executive Chairman Dave Cote struck a confident tone, stating, "We ain't done yet." CEO Giordano Albertazzi expressed unprecedented excitement for Vertiv's future. CFO Craig Chamberlin addressed tariff concerns, indicating the company expects to have "materially offset" related negative margin impacts by the end of the first quarter.
The positive sentiment spilled over to other sector players. Shares of Eaton, Hubbell, and Trane Technologies also moved higher in late trading, as all supply critical equipment for data center infrastructure.
Investor Focus and Potential Risks
While the results were celebrated, investors are now keenly watching to see if the extraordinary order momentum can be sustained into the March quarter. A key question is whether this quarter represents a fundamental inflection point or a temporary surge as customers build capacity. Analysts and shareholders will be scrutinizing the company's upcoming investor conference in May for details on capacity expansion plans and the timeline for converting the substantial backlog into revenue.
Potential risks include the possibility of order delays or cancellations, especially if large-scale cloud service providers (hyperscalers) adjust their capital expenditure plans. The rapid backlog build also places execution and supply chain capabilities under the microscope.
