JPMorgan analyst Stephen Tusa says Amazon Web Services (AMZN) developing its own in-house data center cooling system is not material enough to influence Vertiv’s (VRT) earnings to the extent suggested by yesterday’s share selloff. The firm believes Vertiv was not surprised by the development at Amazon and its channel checks suggest this is becoming “somewhat normal course” as many hyperscalers are developing designs. It is likely that AWS will be outsourcing many of the components the for its, making the company’s “move not as disruptive to the demand inflection as it’s being made out to be,” the analyst tells investors in a research note. JPMorgan keeps an Overweight rating Vertiv with a $127 price target.
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