This data center stock is up over 1000% in the last five years. Trader Mike Khouw sees more gains
Vertiv shares are up a Micron-like 1043% over the past five years, so investors might be forgiven for profit taking.
Vertiv Holdings has posted a spectacular rally, climbing more than 1,000 percent over the past five years, a performance that rivals the meteoric rise of Micron. The Ohio‑based maker of electrical power equipment supplies critical DC power, heat‑rejection and cooling systems to data centers, a sector that continues to pour massive capital into infrastructure.
Strong Q2 ’26 Results
During the second‑quarter 2026 earnings call, Chief Executive Giordano Albertazzi highlighted a 24 percent jump in net sales and a 410‑basis‑point lift in adjusted operating margins. He said the company lifted its full‑year 2026 guidance across every key metric, describing the momentum as “strong, broad‑based and accelerating.” Albertazzi added that he feels more confident about the company’s trajectory now than at any previous point.
Supply‑chain Hiccups and Recovery
The earnings release sparked a brief sell‑off, not because of the outlook but due to worries that supply‑chain bottlenecks would shift a portion of sales into the second half of the year. After the dip, the shares rebounded and are currently trading just under the pivotal 150‑day moving average. The steep climb—1043 percent over five years—has prompted some investors to take profits, yet the stock remains well above its historical baseline.
Upcoming Earnings and Potential Rebound
Vertiv is slated to report its next quarterly results on October 22. If the firm stays on track to meet or surpass the heightened full‑year guidance disclosed in the latest quarter, analysts expect the price to recapture much of the ground lost since the mid‑May highs.
Trading Play Recommendation
Trader Mike Khouw proposes a longer‑dated call‑spread risk‑reversal that captures the October earnings window. The structure involves a January series with strikes at $240, $290 and $340, priced essentially at breakeven—meaning the options premium results in neither a net debit nor a net credit. In the worst‑case scenario, the investor would purchase the stock at $240, roughly 14 percent below the current market level and near the lows seen after the Q4 2025 earnings release in February. The maximum upside of the spread is $50, translating to a gain of more than 20 percent on the $240 short‑put strike.
Khouw notes that, under normal circumstances, he prefers option positions with 15‑ to 60‑day expirations when he is net short. This particular trade extends well beyond that range to provide flexibility on the timing of profit realization. Should the position work out but the trader wish to defer recognition of gains until after 2026, the spread can be held into early 2027, offering additional timing options while still generating short‑term capital‑gain treatment.
Disclaimer
All viewpoints expressed by CNBC Pro contributors represent their own opinions and do not reflect the positions of CNBC, its parent company, or any affiliates. The material is supplied for informational purposes only and does not constitute financial, investment, tax, legal advice, or a recommendation to purchase any security. Content is general in nature and may not suit individual circumstances. Readers should consider consulting their own financial or investment advisors before making any decisions.
Source: CNBC · 2026-09-08