UBS says Vertiv (VRT) shares dropped 14% Thursday after Amazon Web Services announced the launch of a liquid cooling system for data centers. While liquid cooling for data centers is a relatively small part of Vertiv’s overall business, it represents a disproportionate share of growth, so the stock underperformance on the headlines is understandable, the analyst tells investors in a research note. However, UBS believes the investor fears are “misguided.” Based on its checks, the firm does not believe Amazon is competing with Vertiv’s liquid cooling offering. This would entail Aman manufacturing many components like coolant distribution units, heat exchangers, and cooling fluid, says UBS. It keeps a Buy rating on Vertiv with a $115 piece target.
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Read More on VRT:
- AWS likely outsourcing many cooling system components, says JPMorgan
- Selloff in Vertiv Stock (VRT) on Amazon’s In-House Cooling Tech is ‘Overdone,’ Say Top Analysts
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