VRT is still a "Cool" Buy, Citibank says !

JC888
09-24

26 Nov 2024.

On 26 No 2024, I had shared a post on $Vertiv Holdings LLC(VRT)$. click here ! for details.

It is an American multinational company (MNC) that designs, manufactures, and services technologies for critical digital infrastructure—primarily for data centers, communication networks, and industrial environments.

What makes VRT special ?

VRT stands out as a core enabler of the AI and cloud boom, specializing in (a) advanced power and (b) cooling solutions essential for hyperscale data centers and high-density computing environments.

Back in November 2024, it was at $125.75 per share.

Fast forward to September 2025, its at $142.61 per share (as of 23 Sep 2025 closing), up by +13.41%.

At first glance it looks impressive but there is a storm brewing for VRT. Take a look at its 1-day performance and it is obvious.

On Tue, 23 Sep 2025, VRT has fallen by -6.15% (or -$9.35) in a single day, its biggest fall since Trump’s ‘Liberation Day’ in early April 2025.

Root Cause.

The fall came hard & fast after $Microsoft(MSFT)$ announced - successful testing of a new microfluidic cooling system for data center chips that could potentially disrupt the thermal management market.

The New Method.

MSFT’s new cooling technology removes heat up to 3x more efficiently than cold plates, an advanced cooling method currently used in data centers.

The system uses microfluidics to bring liquid coolant directly inside silicon chips through tiny etched channels, addressing the growing challenge of heat management in power-intensive AI applications.

This new method of cooling hyperscalers, represents a potential competitive threat to VRT, that specializes in critical digital infrastructure solutions including cooling systems for data centers.

As a major provider of thermal management technologies for the rapidly expanding AI infrastructure market, VRT could face pressure if MSFT’s technology gains widespread adoption.

Pipeline Research.

The use of microfluidics to cool chip is not a newly cooked concept. In fact there was an article on it back in January 2024. (see below)

The post suggested microfluidics is not yet commercially mainstream, but a “lighter touch” approach could reach the market in a few years.

That is provided AI-chips maker $Taiwan Semiconductor Manufacturing(TSM)$ or Samsung‘s Foundry Services - participate, with more integrated solutions will require substantially longer to become commercially viable.

Who would have know that one year eight months on, MSFT would actually have a ‘working’ prototype.

MSFT Stock Price Movement.

Despite the ‘good’ news, MSFT stock price did not soar on Tue, 23 Sep 2025.

Did Mr Powell’s first public engagement since 17 Sep 2025 interest cut announcement, had a ‘greater’ impact on US market overall, ‘overshadowing’ MSFT’s good news ?

My viewpoints: (mine only)

I think US market again had a knee-jerk reaction to MSFT’s announcement. (see below)

Similar incident had happened back in July 2025 when $Amazon.com(AMZN)$’s AWS (Amazon Web Services) revealed it has developed a liquid-cooling system for its data-center computers.

Market too had perceived as a threat to systems from VRT.

On the fateful day of 10 Jul 2025 - VRT opened the day at $128.00 and by the time 4pm came around, it was at $120.72; losing -5.69% or -$7.28.

Citi To The Defense.

Back in July 2025, when VRT first encountered a similar incident from AWS, $Citigroup(C)$ had cited the following reasons to backup VRT:

  • Citi believes the VRT’s sell-off after Amazon's liquid-cooled servers announcement was "overdone" and an overreaction.

  • VRT has strong recent order growth, giving it good visibility on near-term business.

  • VRT’s market leadership in power and thermal management remains firmly intact.

  • VRT offers global services and holds strong relationships with major chipmakers.

  • The sell-off as a good buying opportunity for VRT shares.

  • Citi expect liquid cooling’s market share to grow from ~15% today to ~30% by 2027.

  • VRT is seen as a main beneficiary of this growing liquid cooling market.

  • Citi expects VRT to continue benefiting from (a) strong AI data center expansion and (b) infrastructure demand.

This reflects a confident, positive outlook on VRT’s medium-term growth despite short-term market fears.

Looking at VRT’s historic performance, it managed to recover from the AMZN’s scare and scaled to new heights in August 2025.

Is the MSFT’s announcement, a repeat of AMZN’s July incident and in the process presented a “buying” opportunity of VRT ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

  • Do you think US market overreacted to MSFT’s announcement especially when its not the first ?

  • Do you think now is the time to buy VRT and wait for it to fly higher ?

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