We recently published a list of 15 Most Crowded Hedge Fund Stocks That Are Targeted by Short Sellers. In this article, we are going to take a look at where Vertiv Holdings Co (NYSE:VRT) stands against other most crowded hedge fund stocks that are targeted by short sellers.
Hedge funds piling into a stock is a signal of conviction. After all, if institutional investors are backing a company, there has to be a good reason for it, right?
Things get interesting when the same stock ends up with a high short interest. Where some investors back the company to become successful, others bet on its downfall. This contradiction is often eagerly tracked by investors, as it can potentially lead to explosive moves to either side.
Consider, for instance, a scenario where a stock with a high short interest and a high hedge fund holding starts going up. As everyone rushes to buy more of the already popular stock, short sellers rush to close their positions, triggering a strong bull rally.
We decided to shortlist stocks that were the most likely candidates for such a rally. To come up with our list of 15 most crowded hedge fund stocks that are targeted by short sellers, we only considered stocks with a market cap of at least $1 billion and a short interest of at least 3%. We then ranked these stocks by the number of hedge funds that have the stock in their portfolio.
A close-up of a group of technicians working on complex data center systems.
Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 92
Short Interest: 3.45%
Vertiv Holdings Co. (NYSE:VRT) specializes in manufacturing, designing, and servicing critical digital infrastructure technologies and equipment for communication networks, data centers, and commercial and industrial environments. The company was eliminated from the list of shared favorites in the fourth quarter.
Vertiv Holdings Co. (NYSE:VRT) recently reported its Q1 2025 financial results, indicating better-than-expected earnings. Fueled by higher volumes and operational leverage, operating margin saw an expansion of 130 basis points year-over-year. In the APAC and Americas regions, the strongest revenue growth was recorded. The company demonstrated a robust operational and free cash flow performance, as net leverage improved to 0.8x. Its solid financial position offers flexibility for investment and future growth.
Based on strong earnings, management increased its fiscal 2025 organic sales growth guidance. Aided by a robust pipeline and backlog growth, the company now expects organic sales to grow by 18%. EPS is anticipated to grow by 25% year-over-year. Because of projected tariff impacts, adjusted operating margin guidance was reduced by 50 basis points. For the second quarter, the firm projects organic sales growth of 21% year-over-year.
Overall, VRT ranks 2nd on our list of most crowded hedge fund stocks that are targeted by short sellers. While we acknowledge the potential of VRT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than VRT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.