We recently published a list of 10 Best Electrical Equipment Stocks to Buy Now. In this article, we are going to take a look at where Vertiv Holdings Co (NYSE:VRT) stands against other best electrical equipment stocks to buy now.

The global electrical equipment market size was pegged at US$1,513.22 billion in 2024, and the market is expected to grow from US$1,660.20 billion in 2025 to US$3,326.86 billion by 2032, according to Fortune Business Insights. The expansion in IT, manufacturing, healthcare, and telecommunications continues to increase the requirement for electrical machinery and equipment. Furthermore, increased trade and globalization result in an exchange of electric equipment, leading to enhanced market access and higher sales. Also, urbanization increases demand for electrical appliances in residential, industrial, and commercial applications.

The broader US electric equipment industry continues to play an important role in both the EV and data center markets. Growth in EVs helps increase demand for high-voltage infrastructure, charging networks, and grid upgrades. Battery manufacturing and assembly plants need advanced electrical systems, which fuel demand for industrial power solutions. Since data centers demand high power and reliability, they also need a strong electrical infrastructure.

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Key Trends Likely to Shape the Electrical Equipment Industry

The regulatory framework for energy efficiency and the uptake of renewable energy is expected to intensify the market trend, opines Fortune Business Insights. The EV market is expected to be supported by the creation of a regulatory framework for energy-efficient motors possessing long life expectancies. Notably, electrical equipment happens to be the primary element fulfilling the criteria, including high-efficiency ratio, product purity, low energy costs, reliability, and sustainability for carbon emission-free vehicles. Fortune Business Insights believes that increased investment in EVs and advancements in battery technology are some of the global EV market trends. Significant momentum in battery technology continues to ramp up the EV market growth, and while global efforts remain focused on the improvement of range and reduction in charging times.

Furthermore, innovations including solid-state batteries and enhanced lithium-ion designs are witnessing traction, which can result in greater efficiency and reduced costs. Such advancements remain important for leading industry players, allowing them to meet increased consumer demand for reliable and long-range EVs. These demand trends are expected to significantly help the broader electrical equipment market in 2025. EV chargers need significant electrical hardware, including circuit breakers, transformers, control systems and power distribution units. Also, widespread EV adoption can pressurize the local electric grids, necessitating upgrades. This can benefit grid automation, smart grid technologies and load balancing.

Fortune Business Insights highlighted that hybrid and multi-cloud deployments continue to emerge as a critical market trend in the AI Data Center market. As and when AI models evolve, there is a need for varying computing, storage and networking requirements. Such favorable demand trends can help the broader electrical equipment market as AI centers require precise and reliable power distribution. This can help fuel growth in power monitoring and control systems, low and medium voltage electrical panels, among others.

Our Methodology

To list the 10 Best Electrical Equipment Stocks to Buy Now, we used a Finviz screener to shortlist the companies catering to the broader electrical equipment industry. After getting an extended list of 20-25 stocks, we chose the ones that are popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiment, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Vertiv Holdings Co (NYSE:VRT)

Number of Hedge Fund Holders: 92

Vertiv Holdings Co (NYSE:VRT) is a leading player in the broader electrical equipment sector, and it specializes in critical infrastructure solutions for data centers, communication networks, and industrial and commercial environments. Bank of America Securities analyst Andrew Obin reiterated a “Buy” rating on the company’s stock, setting a price objective of $135.00. The rating is backed by a combination of factors demonstrating Vertiv Holdings Co (NYSE:VRT)’s strong performance and growth potential. Vertiv Holdings Co (NYSE:VRT) saw a significant reacceleration in orders’ growth, fueling investor confidence. Notably, Q1 2025 orders rose ~13% as compared to Q1 2024 and increased ~21% sequentially from Q4 2024.

This growth in orders, despite the tough comparisons from the previous year, demonstrates a strong demand for the company’s offerings, mainly in the data center sector, says the analyst. Vertiv Holdings Co (NYSE:VRT)’s management maintained its 2025 adjusted EPS guidance, effectively mitigating the negative impacts from tariffs. The company expects adjusted diluted EPS in the range of $3.45 – $3.65 in FY 2025. Its ability to adjust pricing and reprice portions of the backlog can support the margin improvements. The analyst believes that sustained demand for data centers and its strategic positioning in the market support the favourable outlook. Overall, the growth in the electrical equipment market, mainly due to a surge in AI and data center infrastructure demands, is expected to help the company.

Hardman Johnston Global Advisors, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“From a sector standpoint, the main drivers of the portfolio’s outperformance during the fourth quarter were Industrials and Materials. Within Industrials, Howmet Aerospace, Inc. and Vertiv Holdings Co (NYSE:VRT) were the largest contributors to outperformance. Vertiv has been a stellar performer for the past year and beyond. The global leader in data center thermal and electrical equipment continued to execute on its record backlog, with strong order flow largely related to AI-driven data center demand. Data center operators and hyperscalers are partnering with the company to develop next generation designs to optimize power and thermal efficiency. Vertiv’s global service network is uniquely positioned to help clients design and maintain these important data centers.”

Overall, VRT ranks 1st on our list of best electrical equipment stocks to buy now. While we acknowledge the potential of VRT as an investment, our conviction lies in the belief that some deeply undervalued 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 a deeply undervalued 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.