Vertiv VRT is benefiting from a significant expansion in its operating margins, driven by a combination of robust organic sales growth, operational leverage, disciplined cost management, and favorable price-cost execution.
In the first quarter of 2026, Vertiv reported an adjusted operating margin of 20.8%, which was up 430 basis points year over year and 180 basis points above guidance. This margin expansion was supported by strong top-line growth, particularly in the Americas, where organic sales surged 44%. The company’s ability to capitalize on the accelerating demand for data center infrastructure, especially in AI and cloud deployments, has been a key factor in this performance.
Vertiv’s expanding portfolio and acquisitions are also contributing to margin stability and growth. Strategic acquisitions, such as PurgeRite, have strengthened Vertiv’s liquid cooling and system-level service offerings, which are critical for modern data centers. The integration of solutions like SmartRun and OneCore enables the company to deliver converged, prefabricated systems at scale, supporting higher margins and differentiating the company from competitors.
Vertiv remains confident in the persistence of strong operating margins. For the second quarter of 2026, management expects operating margin to be in the range of 20.7%-21.7%. The company anticipates offsetting unfavorable tariff impacts through pricing and operational actions materially.
Vertiv’s management has raised 2026 guidance. The company now expects an adjusted operating margin of 23.3%, representing a 290-basis-point expansion from 2025. This outlook is supported by continued robust demand, especially in the Americas and APAC regions and a recovering EMEA market. While there may be short-term fluctuations, such as a slight dip in the second-quarter margins due to capacity ramp-up and tariff adjustments, Vertiv expects overall incremental margins in the range of 30% to 35% for 2026.
VRT Suffers From Stiff Competition
Vertiv’s AI infrastructure solutions are facing increasing competition from Amphenol APH and Super Micro Computer SMCI. Both Amphenol and Super Micro Computer are expanding their offerings to support high-density, AI-driven data center deployments.
Amphenol is benefiting from a significant expansion in its operating margins. In the first quarter of 2026, the company reported an adjusted operating margin of 27.3%, which marks a robust increase of 380 basis points from the prior year, driven by robust operating leverage on significantly higher sales volumes. A major factor behind this margin expansion is Amphenol’s broad-based growth across diverse end markets. The IT datacom segment, fueled by surging AI investments, accounted for more than 40% of sales and grew organically by 81%.
Super Micro Computer is evolving from just a server and hardware vendor into a full IT solutions provider. Products like DCBBS (Data Center Building Block Solutions) bundle hardware, software, cooling, networking, and support into complete systems. This strategy increases revenue per deal and improves margins. In the third quarter of fiscal 2026, Super Micro Computer’s non-GAAP operating margin improved to 7.3% from 4.5% in the previous quarter.
Vertiv’s Share Price Performance, Valuation, and Estimates
VRT’s shares have surged 94.8% in the year-to-date period compared with the broader Zacks Computer & Technology sector's rise of 21.3%. The Zacks Computers - IT Services industry declined 14.8% in the same time frame.
VRT Stock Performance
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Vertiv stock is trading at a premium, with a trailing 12-month Price/Book of 28.57X compared with the Computer and Technology sector’s 10.44X. VRT has a Value Score of D.
VRT Valuation
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The Zacks Consensus Estimate for 2026 earnings is pegged at $6.36 per share, which has decreased 0.93% over the past 30 days. This indicates a 51.43% increase from the reported figure of 2025.
Vertiv Holdings Co. Price and Consensus
Vertiv Holdings Co. price-consensus-chart | Vertiv Holdings Co. Quote
Vertiv currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Amphenol Corporation (APH): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).