VRT is an undervalued, high-risk/high-reward AI infrastructure play due to a low PEG ratio (~1) and strong growth from Nvidia partnerships and data center demand.

Today we will talk about one of my new favorite artificial intelligence stocks that I am currently following, which is the Vertiv stock, symbol (VRT). The reason I'm talking to you about this stock today is that I intended to include it in the " discounted stocks" series for September.

As you know, the more I delve into researching this company and stock, the more thorough my study of it becomes . I began to conduct more research, staying up late into the night to examine their fundamentals and everything related to them.

The more I researched , the more I felt that this stock represented great value, to the point that it deserved its own separate video in which I would explain everything about it .

Initially, as I said, my plan was to include them in the three-stock series offered for sale, which, as you know, what I usually do in those episodes is to pick one low-risk option, one medium-risk option, and one high-risk option.

But for this month, I would put Vertive in the high-risk category. Which I still consider to be high risk, by the way, this stock that we are talking about today. Um, but, by the way, I'll cover the risks in this video.

I will talk about the risks associated with this stock because there are some very real risks that you should be aware of.

Um, as for me, as I said, I was doing my own research on this company and I was beginning to realize that this looked more and more like a great type of high-risk but also high-profit investment in the field of artificial intelligence.

A slightly riskier investment, perhaps a bit of speculation depending on how you define the term, but for me, it's a type of AI stock that has a lot of potential and is a bit overlooked in my opinion.

I actually think this stock is being ignored. Um, but yes, the more I learn about them, the more I realize how wonderful the qualities of this company and this stock are. The stock as well, along with the valuation, and everything that is happening with it at the moment .

So, let's get down to business . What I really want to start with is that, you know, while the rest of the market , and you know this, has become very obsessed, especially recently, with the kind of companies that I think are designing and manufacturing actual AI chips.

And for good reason, of course . But I just feel that Vertiv is a great alternative to some of that, as it actually provides a lot of the vital infrastructure that keeps those AI-critical chips running smoothly across the data center.

For those who don't know, this company actually builds a lot of heavy physical infrastructure , such as massive uninterruptible power supply systems , what we call UPS, as well as electrical wiring, switchgear, server cabinets, and even the liquid cooling chillers that fill the halls of data centers.

Thus, these giant thermal cooling and power distribution systems are what modern data centers need to stay operational and perform at their best possible level.

Well, Vertiv provides advanced closed-loop cooling designs with fluid management services that can operate with near-zero water consumption. Once these physically heavy devices are installed in a massive data center, the costs of change can be very high, meaning these high-paying customers are effectively tied to Vertiv's integrated system of products and services continuing for years to come.

Now, if the work is so vital, why do I still consider that this carries some significant risks that you should be aware of? Well, we all know the enormous amount of money that giant technology companies are pouring into artificial intelligence.

But if at any time they suddenly decide to cut back and begin reducing their massive capital expenditures, one of these approved providers of this infrastructure is very likely to take a big hit, which is something that is constantly being talked about on Wall Street , isn't it?

It's the idea of whether the artificial intelligence bubble, as it's called, might eventually burst at any time.

Personally, I don't much belong to that camp that believes this will happen any time soon, or anything like that. Because I strongly believe that artificial intelligence is a transformative technology that is being integrated into everything we do in the world, and I feel that it will truly revolutionize the entire world, the way we think, and the way we run things.

Now , I'm not saying I support that, by the way. I am actually not happy that this happened . I don't really trust artificial intelligence and I have a lot of concerns about it.

But I think it is a reality we live in and are moving towards. Especially in the business world, companies will gradually begin to accept this reality more and more over time.

However, I believe that the demand for artificial intelligence will continue to rise wildly, as more companies realize that if they do not use and adopt it, they really risk falling behind others who will undoubtedly use it to gain a competitive advantage.

This is a cumulative effect that will make many companies want to spend more on artificial intelligence over time, because if they don't , competitors will get ahead of them, they may fall behind, and even risk failure.

But the mere idea of a potential bubble that might eventually burst, I feel, is enough to scare investors and drive them to sell stocks in a panic even when it is not necessarily justified.

I will take Vertief as an example. This is a company that is currently achieving tremendous success . It is operating at full capacity. In the last quarter, for example, sales reached approximately $3.3 billion, representing a massive 24% year-over-year growth.

But because this figure came in at the lower end of expectations, investors rushed to sell immediately, causing the stock to drop by about 20% in one day after that report.

The administration explained that it was simply dealing with temporary supply chain issues and some other implementation hurdles in its complex, multi- phase projects. But in a market where AI stocks are sometimes priced on the basis of absolute perfection, any bump in the road or implementation hurdle will trigger a significant correction, even if it is not entirely justified.

In this case, and in my personal opinion, it is not justified at all. There are several reasons why I feel this way . Firstly, those disappointing sales in the last quarter were mostly just a timing shift that would be rolled over to the next quarter anyway.

In fact, their business performance is so good at the moment with all the AI data centers being built and requiring their products, that management has already raised its expectations for the entire year across the board , now forecasting massive total sales of up to 14 billion for this year, an increase of 37 %.

More importantly, their actual earnings are rising at even higher rates, with adjusted earnings per share jumping 60% in the last quarter, which has also been raised in their forecasts, along with free cash flow and operating margins.

Looking further ahead, demand for Vertief is expected to continue to rise over time. Look, one of the biggest existential threats to the entire AI revolution right now is a lack of electricity.

It is estimated that the United States alone will need more than 230 gigawatts of new power capacity over the next five years. Well, that's more than double what energy utilities are currently expected to be able to provide .

Thus, as these data centers collide with this giant power wall, they are forced to extract as much computing power as possible from every megawatt they can get. Well, that's exactly where Vertief comes in as well.

They are actively collaborating with Nvidia to build a next-generation 800-volt DC power infrastructure, specifically designed for Nvidia's latest Vera Rubin accelerators . Now, these 800- volt systems are enormously more powerful , and their operating costs are about 10% lower than the standard equipment used today.

Therefore, they are deploying these high- efficiency standard products with this massive, integrated AI infrastructure, which includes liquid cooling using Nvidia's GB300 systems , and through the partnership with Nvidia, they are truly ensuring that they remain connected to the best- performing and fastest-growing segments of the market .

They have even acquired other companies as well, to maintain this growth. They have acquired new heat management companies such as ThermalKey and Strategy Thermal Labs - apologies - to aggressively expand their liquid cooling technologies.

They even recently opened a new factory in Malaysia to expand production of prefabricated liquid cooling units and power units for data centers across Asia as well.

This alone should not be underestimated, folks. This is a major expansion taking place internationally, and I believe it will be a huge growth engine for them in the coming years.

It is extremely important. For this reason, analysts strongly expect their sales and profits to continue rising strongly, breaking new records along the way.

Well, the result of all this is that investors are focusing on all the recent concerns, causing the stock to fall by about 35% from its highest levels. Because of that, Vertiv's valuation is actually much cheaper now than you might think.

Full Street, in my opinion, is focusing more on current indicators of a high price-to-earnings ratio that is about 90% higher than the sector average.

But when you take into account all the future growth to come, the PEG (price-to- earnings-to- growth) ratio drops to about one. Now, folks, for a company that is expanding its sales and profits massively and breaking records by billions of dollars every year, a PEG ratio of one means an insanely cheap valuation.

In fact, it is 35% lower than the sector average. And it is precisely here that I believe all the potential, or perhaps the hidden potential, truly lies in a stock like this. This is where I think you get some kind of high profit potential.

Again, there are risks here, and there is increasing competition from large industrial players such as Eaton and Schneider Electric, as well as other global infrastructure providers now expanding into data center power distribution such as ABB.

But for the long-term investor looking for an AI stock that is high-risk but with very high profit potential, it may be "undervalued" enough. I think this is really one of the best options available for that.

I think it will be volatile, but when I look at that recent dip, the very cheap valuation, the massive growth, and Nvidia's deep partnerships that greatly increase their competitive advantage.

I just feel that this might really be an underappreciated opportunity in the field of artificial intelligence.

Do you think this stock is worth buying? Or do you believe that all these risks outweigh the potential for profit, even in the long term ?