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Key Takeaways

• Data center stocks have been hit hard recently, which may perhaps bring about some buying opportunities.
• Despite poor price performance, many data center-related stocks maintain big growth outlooks.

As we’ve all become aware, volatility has swept the markets over recent weeks, with tariff talks and other economic data causing a risk-off environment.

Many stocks, including those involved in the data center side of the AI frenzy – such as Vertiv (VRT - Free Report), Super Micro Computer (SMCI - Free Report), and Arista Networks (ANET - Free Report) – have faced pressure, with shares well off of 2025 highs.

But could this be a buying opportunity? Let’s take a closer look at the recent standing of each stock.

Vertiv Raises Sales Outlook

Concerning headline figures in Vertiv’s latest release, it exceeded both consensus EPS and sales expectations, with EPS soaring 77% on the back of a 26% move higher in sales. The growth rates are quite significant, reflective of healthy underlying demand.

Below is a chart illustrating the company’s sales on a quarterly basis.

Image Source: Zacks Investment Research

Importantly, Vertiv upped its full-year 2025 sales guidance into a band of $9.1-$9.3 billion, with the midpoint reflecting roughly 16% year-over-year growth. Vertiv also reaffirmed its five-year financial outlook, citing growing AI adoption as a key driver of data generation and data center demand. The company overall remains to benefit in a big way from providing the critical infrastructure needed to support the expansion.

Valuation isn’t rich, with the recent 0.8X PEG ratio indicative of both growth and value. The forward 12-month earnings multiple works out to 22.7X, nearly half of 2025 highs of 43.9X.

Image Source: Zacks Investment Research

Arista Networks Unlocks Higher Profits

Analysts have continued to be bullish on Arista Networks' EPS outlook over recent months, with the stock holding a favorable Zacks Rank #2 (Buy) rating. Strong quarterly results that have revealed snowballing demand have been a big tailwind for the stock amid the AI frenzy.

Image Source: Zacks Investment Research

Below is a chart illustrating the company's sales on a quarterly basis, with the AI boost easily noticeable over the most recent periods. The strong top line growth looks set to continue nicely, with current year expectations alluding to 18% year-over-year growth.

The stock sports a Style Score of ‘A’ for Growth.

Image Source: Zacks Investment Research

In addition, the company’s margin performance has been positive over recent quarters, providing a nice profit boost overall. Arista Networks' data center products are likely higher-margin by nature, helping to partially explain the positive change.

Image Source: Zacks Investment Research

Super Micro Computer Outlook Remains Cloudy

As the most volatile of the bunch, Super Micro Computer shares have been hit hard from their rich 2024 high, down 66% since. A short report took a lot of wind out of its sail last year, but it’s critical to note that the company cleared the allegations after a period of uncertainty.

Image Source: Zacks Investment Research

Quarterly results haven’t been enough to shake the stock out of its slump, with the company’s recent negative EPS outlook warranting a level of concern. Super Micro Computer is currently a Zacks Rank #4 (Sell) rated stock due to the cloudy earnings picture.

Image Source: Zacks Investment Research

The company is still forecasted to see 15% EPS growth on 59% higher sales in its current fiscal year, which is undoubtedly impressive, but the growth rates have consistently suffered from downward revisions from analysts over recent months.

Bottom Line

Data Center stocks have been hit hard in the market’s recent wave of volatility, perhaps bringing about nice buying opportunities for those looking to join the trade.

All three stocks discussed above – Vertiv (VRT - Free Report), Arista Networks (ANET - Free Report), and Super Micro Computer (SMCI - Free Report) – are prime considerations for data center exposure, though investors should be patient with Super Micro Computer until its earnings outlook shifts positively.

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