<div id="readability-page-1">Suppose you think of investing a relatively small amount of money in stocks in a diversified portfolio and are looking to spread risk while gaining upside exposure to an exciting growth theme. In that case, the AI/data center space is a good place to start. Vertiv (VRT -1.61%) nVent (NVT 1.28%) may not spring to mind when thinking about how to profit from the booming demand for artificial intelligence (AI) applications and, in turn, data center spending. However, that observation highlights an opportunity for discerning investors to profit. All three provide crucial solutions and services to data centers and represent hidden ways to play the theme. <h2>Vertiv, a hidden data center stock</h2> Vertiv provides digital infrastructure for data centers and communication networks, and its products include power management, switchgear, thermal management, and monitoring and control infrastructure. Emerson Electric sold the company to Tom Gores' private equity company, Platinum Equity, in 2016, which then brought the company to the market in 2020. Its executive chairman is former long-term CEO of Honeywell, David Cote. The company has found itself ideally placed to benefit from the rising interest in data center investment to support application growth, as amply demonstrated by Vertiv's booming backlog growth. That growth continued through the first quarter, with backlog up 10% from the end of 2024. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTczNjAvdmVydGl2LWJhY2tsb2ctbWlsbGlvbnMucG5nJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="299" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTczNjAvdmVydGl2LWJhY2tsb2ctbWlsbGlvbnMucG5nJnc9NzAw"/>Data source: Vertiv presentations. Chart by author. </div> The strength in its orders and backlog growth encouraged management to raise the midpoint of its full-year organic revenue growth forecast to 18% from a prior estimate of 16% on its recent Q1 earnings call. However, management maintained the midpoint of its profit margin, profit, and cash flow guidance due to uncertainty over tariffs. Still, Vertiv's management and Wall Street analysts expect $1.3 billion in free cash flow (FCF) in 2025, and Wall Street expects $1.65 billion and $1.79 billion in FCF in 2026 and 2027. With a current market cap of $36.1 billion, Vertiv would trade on 28 times and 22.5 times FCF in 2025 and 2026. That's not outstandingly cheap, but it will look like a good value if the trend toward accelerating AI/data center demand continues. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTczNjAvZ2V0dHlpbWFnZXMtMTM2ODM1Mjc3NS0xMjAweDgwNy0xZTc5MTdjLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="471" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTczNjAvZ2V0dHlpbWFnZXMtMTM2ODM1Mjc3NS0xMjAweDgwNy0xZTc5MTdjLmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> <h2>nVent is increasing its power utilities and data center exposure</h2> nVent offers electrical connection and protection solutions to various industrial, commercial, and residential customers. Those end markets include data centers and the power utilities that generate the energy to power them. Management has made a conscious decision to increase the company's exposure to these attractive end markets by divesting its thermal management business in January, and then completing the purchase of the electrical products group business of Avail Infrastructure Solutions for $975 million. The deal means infrastructure (data solutions and power utilities) now makes up 40% of its portfolio. It's also the fastest-growing end market for nVent. CEO Beth Wozniak noted that its data solutions organic orders rose at a strong double-digit rate in Q1, compared to mid-single-digit growth for the rest of the business. Ultimately, the strength in data solutions order led to mid-teens growth in organic orders in Q1. Just as with Vertiv, nVent's excellent first quarter encouraged management to raise its full-year sales guidance to organic growth of 5% to 7%, compared to a previous estimate of 4% to 6%. However, unlike Vertiv, nVent's management raised its full-year earnings growth guidance to 22% to 26%, compared to an earlier estimate of 20% to 24%. In addition, these forecasts include an assumption of a negative tariff effect of $120 million. Wozniak was clear that power utilities and data centers are driving nVent's growth when she said: &#34;As we look at data solutions and power utilities, in particular, here's where we see that growth accelerating.&#34; Despite fears of a slowdown in data center spending going into earnings season and the possible effect of tariffs on business confidence through April, data center spending remains robust. Wall Street analysts share this view, seeing nVent report $3.09 and $3.46 in earnings per share in 2025 and 2026, with FCF coming in at $406 million and $561 million. Those estimates put nVent on less than 20 times earnings in 2025, 17.4 times earnings in 2026, and 24 times FCF and 17.7 times FCF in 2025 and 2026. These are attractive multiples, and with upside potential, nVent is an excellent stock to buy. </div>

The article discusses investment opportunities in AI and data center stocks, highlighting Vertiv and nVent as promising options. Vertiv, with a market cap of $36.1 billion, has raised its revenue growth forecast to 18% due to strong backlog growth. nVent, focusing on electrical solutions for data centers, has also increased its sales guidance to 5-7% growth. Both companies are positioned to benefit from the rising demand in the data center sector, making them attractive investments for those looking to invest in this growth theme.

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