Zacks Investment Ideas feature highlights: Vertiv and Nvidia

For Immediate ReleaseChicago, IL – March 20, 2025 – Today, Zacks Investment Ideas feature highlights Vertiv VRT and Nvidia NVDA.Time to Buy Shares in AI Leaders Vertiv and NVIDIA?After carrying the stock market higher over the last two years, Vertiv and Nvidia, two of the best performing stocks in the market, have been hammered lower by the recent stock market correction. Trade policy uncertainty, cutbacks on fiscal spending and a potential slowdown in the economy have investors feeling uneasy, adding to the volatility.Though it is impossible to know how long and how deep this correction will go, good investing principles don’t require us to predict what is going to happen in the immediate future. Instead of trying to forecast returns, investors would be better served by looking for stocks that are currently trading at discounts to their historical valuations.Lucky for us, now that Nvidia and Vertiv have fallen 30% and 50% respectively from their recent highs, both are trading at reasonable valuations. Furthermore, both stocks enjoy long-term business and economic tailwinds, with strong growth forecasts in the foreseeable future.Nvidia Stock Near Its Cheapest Valuation in a DecadeOn Tuesday, the NVIDIA GPU Tech Conference (GTC), a week-long event reached its climax when Nvidia CEO Jensen Huang delivered his highly anticipated keynote address. Per usual, Huang did not disappoint, offering numerous exciting developments from the now world’s most innovative company including humanoid robots, quantum computing and more. My colleague Kevin Cook wrote up a fantastic review of the conference here.Most notably, and I thought most importantly for investors was Jensen’s forecasts for future data center capex. He believes that one day, there will be 1 million data centers around the world, as well as what he calls AI factories, which will be visible from space. Huang believes that AI capex will push Nvidia’s annual revenue to $1 trillion by 2028. A bold prediction, but this is the guy that predicted the whole AI boom in the first place and positioned his company at the forefront.I read recently that there will be more data produced in the next three years than all the past history combined, which put into perspective tech companies need to build out their infrastructure.Along with the exciting narrative and Huang’s masterclass of hype-building, Nvidia boasts surprisingly reasonable business fundamentals. In addition to a Zacks Rank #2 (Buy) rating, reflecting rising earnings estimates, profits are projected to climb 25.7% annually over the next three to five years.Furthermore, there have only been two occasions in the last decade when Nvidia traded at a lower relative valuation. Today, the company is trading at a one year forward earnings multiple of 27.9x, well below its 10-year median of 45.1x.Vertiv Shares Trade at a Discount Based on Growth ForecastsVertiv stock has been one of the hardest hit during this recent correction and though challenging for shareholders, provides a compelling opportunity for investors keen on acquiring shares. As a data center service provider, Vertiv has been one of the biggest winners of the AI-boom, with its stock more than 10xing over the last two years before the correction.Investors need to be able to think for themselves and not let sentiment drive their decisions. The goal of a long-term stock investor is to buy great companies at fair valuations and let economic trends and company management do the compounding. With the potential of more than $1 trillion in future data center capex, Vertiv is set to be one of the primary beneficiaries of this ongoing technological revolution.It is also trading at a very reasonable valuation relative to its growth forecasts and historical average. Today, it is at 23.2x forward earnings, which is right in line with its five-year median of 23.1x. Especially compelling are its earnings forecast, with profits forecast to grow 27.4% annually over the next three to five years, giving VRT a PEG ratio of 0.85, a discount based on the metric.Finally, Vertiv also enjoys a Zacks Rank #2 (Buy) rating, reflecting continued bullish support from analysts.Should Investors Buy Shares in VRT and NVDA?While short-term market volatility is unpredictable, long-term investors should focus on buying great companies at reasonable valuations. Nvidia and Vertiv have been among the biggest winners of the AI boom, and despite the recent selloff, their fundamental growth stories remain intact.Both companies are trading at levels that provide a margin of safety for investors. Nvidia is near its cheapest valuation in a decade, and Vertiv, despite its rapid growth, is trading in line with its historical averages while boasting strong earnings forecasts.Given their dominance in AI infrastructure and data center expansion, Nvidia and Vertiv remain two of the most compelling investment opportunities in the market today. While short-term swings may continue, history favors those who buy quality businesses at attractive prices and hold for the long run.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Vertiv Holdings Co. (VRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks