This under-the-radar AI stock may double by 2025

Artificial intelligence-related stocks have rallied this year, with investors piling into favorites like Nvidia and Palantir. Instead of AI pure plays, I still prefer brick-and-shovel under the public radar stocks that will be essential for the long-term infrastructure rollout of artificial intelligence.

So what

Nvidia dominates the market for AI chips with a market share north of 80 %. This is mainly based on selling graphics processing units, GPUs, and the preferred chips to train generative AI models. Every data center that buys GPUs from Nvidia faces the same problem. GPUs run very hot when they’re under load.

Now what

This is where Vertiv (VRT) comes into play. VRT provides solutions to help cool those chips and make data centers operate more efficiently. Specifically, they design, manufacture, and service critical digital infrastructure technology for data centers, communication networks, and commercial/industrial environments. Offerings include alternate current (AC) and direct current (DC) power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. Through its global services network, VRT provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing these products and their related systems. They also offer integrated rack solutions, including rack delivery, rack power, rack power distribution, rack thermal systems, configurable integrated solutions, and hardware for managing information technology (IT) equipment.

Actionable Advice

VRT is up considerably this year, trading a bit north of 40 USD. I think VRT has an excellent tailwind for the next three to five years as the AI hardware buildout continues and the heat issues persist. The next earnings date is October 25, 2023. VRT is one of our core AI holdings. I apply a covered call strategy. I bought a bit north of 30 USD and have sold long-term calls with a strike price of 47.5 USD for a premium of more than 5 USD.