What Happened?
Shares of data center products and services company Vertiv (NYSE:VRT) jumped 18.3% in the afternoon session after it reported solid fourth-quarter results and provided an optimistic forecast for the upcoming year. For the fourth quarter, Vertiv's revenue of $2.88 billion met Wall Street's expectations, while its adjusted earnings per share of $1.36 surpassed consensus by 4.9%. The main catalyst for the stock's surge was the company's forward-looking guidance. Vertiv projected first-quarter revenue to be about $2.6 billion, beating forecasts. More significantly, its full-year 2026 adjusted earnings guidance of $6.02 per share at the midpoint was a substantial 12.9% higher than what analysts had anticipated. This strong earnings outlook, coupled with a robust free cash flow margin that more than doubled year-over-year, signaled to investors that the company's profitability and demand trends remain exceptionally strong.
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What Is The Market Telling Us
Vertiv’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. But moves this big are rare even for Vertiv and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 8.9% on the news that the broader market rebounded from a tech-driven sell-off, with investors taking the opportunity to buy stocks at lower prices. This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.
Vertiv is up 34.8% since the beginning of the year, and at $236.80 per share, has set a new 52-week high. Investors who bought $1,000 worth of Vertiv’s shares 5 years ago would now be looking at an investment worth $11,190.
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