Jim Cramer says this data center equipment firm continues to be a winner in the AI boom

Published Wed, Apr 24 202412:05 PM EDT

CNBC's Jim Cramer on Wednesday suggested that Vertiv 's red-hot business and stock may not cool anytime soon. Shares of the data equipment maker rallied 10% Wednesday after reporting first-quarter earnings before the bell. First-quarter organic orders were up 60% year over year while adjusted operating profit grew 42%. The company also reported a record-high backlog of $6.3 billion at the end of the quarter. It is benefiting from surging investment in artificial intelligence computing power. "The data center ... [is] still hot as ever," Cramer said on "Squawk on the Street." "I give you Vertiv as being still one more data center play that works." Vertiv also raised its full-year 2024 guidance for sales and adjusted operating profit. "The data center market remains extremely positive for the foreseeable future," Vertiv's executive chairman, Dave Cote, said in a press release. Cramer has long been a fan of Vertiv due in part to its ties to Cote, who ran industrial conglomerate Honeywell International from 2002 to 2017. Cramer's Charitable Trust, the portfolio used by the CNBC Investing Club, owns Honeywell shares. In late February, when Vertiv offered soft guidance alongside its fourth-quarter earnings report, Cramer said the weakness was a buying opportunity. Including Wednesday's surge, shares are up nearly 50% since then. Over the past 12 months, Vertiv shares have soared nearly 600%. VRT 1Y mountain Vertiv stock performance 1-year. Ohio-based Vertiv went public via special purpose acquisition company, or SPAC, in February 2020 , using a go-to market strategy that would soon become all the rage on Wall Street that year and throughout 2021. During this time, many unprofitable companies used this route to go public to great fanfare, only for their stocks to eventually flounder. But Cramer labeled Vertiv as one that's been a major success since it has been able to successfully capture growth of the data center market. A recent Investing Club commentary about the " next wave of the AI trade beyond tech " highlighted a number of industrial stocks in the portfolio that are benefiting from the push to build and retrofit data centers to handle AI computing. Jensen Huang, CEO of Club holding and AI chip powerhouse Nvidia , recently described the potential opportunity. "Generative AI has kicked off a whole new investment cycle to build the next $1 trillion of infrastructure of AI generation factories," he said. (Jim Cramer's Charitable Trust is long NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

In this photo illustration, Vertiv Holdings Co logo is seen displayed on a smartphone and a pc screen.

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