Here's Why Data Center Equipment Company Vertiv's Stock Fell in February

Core Viewpoint - Vertiv's shares declined by 18.7% in February due to a sell-off in AI and data center stocks, compounded by disappointing fourth-quarter earnings [1] Group 1: Market Dynamics - The release of DeepSeek's cost-effective AI model raised concerns about potential negative revisions in AI-driven data center spending [2] - The sell-off affected various sectors related to data centers, including power generators and chip designers, but Vertiv's Executive Chairman argued that lower computing costs could lead to increased demand for data centers, which would benefit Vertiv [3] Group 2: Company-Specific Issues - Vertiv's trailing-12-month orders increased by 30%, and its backlog also rose by 30% at the end of 2024 compared to the end of 2023, but fourth-quarter orders were approximately flat compared to the same quarter last year [4][5] - The CEO acknowledged delays in EMEA orders due to regulatory changes and slower decision-making processes, which may be linked to new energy-efficiency regulations set to take effect in 2025 [5] - The current situation may reflect order delays rather than a decrease in end demand, suggesting that orders could still be fulfilled in the future [6]