What Happened?
Shares of data center products and services company Vertiv (NYSE: VRT) fell 12% in the afternoon session after stocks pulled back (Nasdaq -1.5%, S&P 500 -1.2%) amid fresh concerns about trade tariffs. The pullback followed comments from President Trump clarifying the scope of his administration's 25% tariffs on Venezuela. He noted that it would apply to any country that does business with Venezuela. For example, 25% is on top of the already-in-place 20% tariff on China because China imports oil from Venezuela, which could translate to a 45% tariff on some Chinese goods. This announcement could significantly raise the operating costs for affected companies and institutions.
Adding to the market unease, the President announced plans for new tariffs on auto imports before the planned "reciprocal" tariffs on April 2, 2025.
Separately, Barclays cut its price target on the stock. The firm raised concerns about VRT's sales, noting that "first-quarter orders might not be enough to meet revenue expectations.".
The shares closed the day at $81.61, down 10.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Vertiv? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Vertiv’s shares are extremely volatile and have had 51 moves greater than 5% over the last year. But moves this big are rare even for Vertiv and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 5.6% on the news that stocks rebounded, following a broad-based sell-off the previous day. The Nasdaq was down 4%, while the S&P fell 2.7% as concerns over the ongoing trade war continued to spread. While those concerns haven't exactly disappeared, it's likely some investors looked to take positions in some of the beaten-down stocks, especially some of the high-quality names that got caught up in the sell-off.
Vertiv is down 31.4% since the beginning of the year, and at $81.18 per share, it is trading 47.1% below its 52-week high of $153.49 from January 2025. Investors who bought $1,000 worth of Vertiv’s shares 5 years ago would now be looking at an investment worth $9,141.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
