Vertiv Holdings Co (VRT) Fell on Near-Term Slowdown in Demand

Scout Investments, Inc., an affiliate of Carillon Tower Advisers, released the “Carillon Scout Mid Cap Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Russell Midcap Index posted negative returns. Significant policy uncertainty, signaled by aggressive tariff announcements, reversed the positive sentiment prevailing in the domestic market at the start of the year, turning it negative. The first-quarter macroeconomic environment showed signs of slowdown but not recession. The economy seems okay, but downside risks are rising. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Carillon Scout Mid Cap Fund highlighted stocks such as Vertiv Holdings Co. (NYSE:VRT). Vertiv Holdings Co. (NYSE:VRT) provides critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. The one-month return of Vertiv Holdings Co. (NYSE:VRT) was 6.15%, and its shares gained 27.06% of their value over the last 52 weeks. On June 23, 2025, Vertiv Holdings Co. (NYSE:VRT) stock closed at $116.54 per share with a market capitalization of $44.414 billion.

Carillon Scout Mid Cap Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q1 2025 investor letter:

“Vertiv Holdings Co (NYSE:VRT) provides data center infrastructure equipment and services. The stock suffered amid concerns over a near-term slowdown in orders for its cooling systems, which we believe was primarily due to hyperscalers that are redesigning their data centers to cram more equipment into each server rack. Broader concerns regarding artificial intelligence demand and fears of peak levels of capital spending have also weighed on investor sentiment. We believe a significant number of new data centers must be built to meet the demand for increasing AI training and inference workloads globally. These power-hungry systems generate more heat and require greater power density, which can be addressed by the more efficient power and cooling solutions that Vertiv provides.”

Vertiv (VRT) Could Be the Biggest Winner of the AI Data Center Boom

A close-up of a group of technicians working on complex data center systems.

Vertiv Holdings Co (NYSE:VRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 90 hedge fund portfolios held Vertiv Holdings Co (NYSE:VRT) at the end of the first quarter, which was 92 in the previous quarter. While we acknowledge the potential of Vertiv Holdings Co (NYSE:VRT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Vertiv Holdings Co (NYSE:VRT) and shared Hardman Johnston Large Cap Equity Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of VRT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.