Vertiv Holdings (VRT) stock has rallied about 127% year-to-date, driven by strong demand for the company’s power and cooling solutions needed to run artificial intelligence (AI) data centers. The AI infrastructure company recently reported market-beating first-quarter results, thanks to continued strength in demand. Impressed by Q1 results, several Wall Street analysts raised their price targets for Vertiv Holdings stock, reflecting their optimism about the company’s growth potential.
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Aside from directly buying VRT stock, investors can also gain exposure to this AI play through these two exchange-traded funds (ETFs): Defiance AI & Power Infrastructure ETF (AIPO) and TCW Transform Systems ETF (PWRD).
Let’s take a deeper look at these two ETFs.
Defiance AI & Power Infrastructure ETF (AIPO)
The AIPO ETF tracks the MarketVector US Listed AI & Power Infrastructure Index, which comprises companies generating at least 50% of their revenue from AI hardware, data centers, power infrastructure, or related sectors. AIPO helps investors capitalize on the ongoing AI boom by providing exposure to companies having high-growth opportunities in power generation, utilities, construction, and AI-enabling technologies.
Vertiv Holdings is among the top holdings of the AIPO ETF, representing around 8% of the fund’s net assets. AIPO’s other key holdings include Quanta Services (PWR), GE Vernova (GEV), and Eaton Corporation (ETN). Overall, AIPO has $582.44 million in assets under management (AUM) and an expense ratio of 0.69%.
According to TipRanks’ unique ETF analyst consensus, determined based on a weighted average of analyst ratings on its holdings, AIPO scores a Strong Buy consensus rating. Specifically, 63 of its holdings score a Buy rating, while 13 have a Hold. The average AIPO ETF price target of $36.83 indicates about 13% upside potential. AIPO has risen more than 50% so far this year.
TCW Transform Systems ETF (PWRD)
The PWRD ETF provides investors with exposure to companies that are well-positioned to benefit from energy transformation. It comprises leading companies focused on key themes, such as power scarcity and electric grid expansion. It is worth noting that the fund was previously known as the Engine No. 1 Transform Climate ETF and traded under the ticker NETZ.
Vertiv ranks among the top holdings of the PWRD ETF and constitutes 7.4% of the fund’s net assets. Other holdings are GE Aerospace (GE), Powell Industries (POWL), and Broadcom (AVGO). PWRD has $1.48 billion in AUM and an expense ratio of 0.75%.
On TipRanks, PWRD has a Strong Buy consensus rating, with 34 of its holdings rated Buy and one rated Hold. The average PWRD ETF price target of $126.34 indicates 11.3% upside potential. PWRD has risen 18% year-to-date.
Concluding Thoughts
AIPO and PWRD ETFs are attractive alternatives for investors seeking exposure to Vertiv Holdings. They help reduce the risk associated with investing directly in the stock by diversifying across several holdings. Furthermore, low cost and liquidity are some other advantages of ETFs.