UBS Group AG reiterates "buy" rating on Vertiv (VRT.US): Concerns about competition in Amazon.com, Inc.'s (AMZN.US) AWS liquid cooling system are exaggerated.

As one of the artificial intelligence (AI) stocks on Wall Street's radar, UBS Group AG analyst Amit Mehrotra recently reiterated a "buy" rating on Vertiv Holdings (VRT.US) with a target price of $135. UBS Group AG pointed out that the stock price of liquid cooling equipment supplier Vertiv fell after Amazon.com, Inc. (AMZN.US) AWS announced the launch of its liquid cooling system for data centers last week. Analysts noted that while the liquid cooling system accounts for a small portion of Vertiv's overall business, it is a key driver of the company's growth, which is also why the stock has underperformed as the market is sensitive to such news. However, UBS Group AG believes these concerns are misguided. UBS Group AG's on-the-ground research shows that Amazon.com, Inc. does not appear to directly compete with Vertiv's liquid cooling products. This is because, in order to truly compete, Amazon.com, Inc. would need to manufacture multiple components such as coolant distribution units, radiators, manifolds, pumps, etc. The market reaction to Amazon.com, Inc.'s announcement of its liquid cooling system for data centers merely reflects investors' heightened sensitivity to potential competitive threats in the data center cooling market.