The first wave of the AI boom made chipmakers the stars. Now, in the second wave, the companies that worked behind the scenes—building the power, cooling, and optical connections—are getting their turn in the spotlight. It is time for Vertiv (VRT), Lumentum (LITE), and Applied Digital (APLD) to shine. All three are exposed to different parts of the AI infrastructure buildout. According to IDC, the global AI infrastructure spending is expected to surpass $1 trillion by 2029.
And each of these could look like a substantially stronger business by 2029 if today's massive infrastructure spending continues to translate into new data centers and increasingly demanding AI systems.
AI Stock #1: Vertiv Holdings (VRT)
Valued at $94.4 billion, Vertiv supplies the power and cooling infrastructure needed to keep AI data centers running reliably. VRT stock has climbed 53% year-to-date (YTD), outperforming the S&P 500 Index’s ($SPX) 12% gain.
In the second quarter, Vertiv generated $3.3 billion in revenue, up 24% year-over-year (YoY). Organic sales increased 18%, while adjusted earnings per share (EPS) rose 60% to $1.52. The company is expanding its capacity while simultaneously broadening its thermal-management capabilities. This is significant because cooling becomes increasingly crucial as AI racks get more power-intensive. Vertiv's investments in electricity, liquid cooling, heat rejection, and related infrastructure expand its ability to participate in global AI infrastructure spending.
At the 2026 investor event, the company outlined a five-year revenue CAGR target of 20% to 22% and an ambition to reach a 27% adjusted operating margin by 2030. Trading at 26x forward earnings, Vertiv isn’t exactly a cheap stock. But its earnings growth rate could make today’s premium look considerably less demanding. Analysts expect adjusted EPS of $6.73 in 2026, implying roughly 60% growth, followed by another 36% to $9.16 per share in 2027.
The 2029 opportunity rests on whether Vertiv can keep translating AI infrastructure demand at this rate. If it can, today's valuation could look very different several years from now.
On Wall Street, VRT stock is an overall “Strong Buy.” Of the 27 analysts covering the stock, 21 rate it as a “Strong Buy,” two call it a “Moderate Buy,” and four recommend a “Hold.”
AI Stock #2: Lumentum Holdings (LITE)
Valued at $83.3 billion, Lumentum Holdings makes optical and photonic components that help move massive amounts of data through AI and cloud data centers. Its products include lasers, transceivers, and optical circuit-switching technology. Lumentum stock has soared 141% so far this year, outperforming the broader market.
As AI clusters expand, optical connectivity is becoming more valuable as electrical interconnects face bandwidth, power, and distance constraints. Lumentum generated $1 billion in revenue in fiscal Q4, an increase of 109.3% YoY. For fiscal 2026, revenue increased 83.2% YoY to $3 billion. The adjusted operating margin also increased to 29.8% compared to just 9.7% a year earlier.
The company is entering fiscal 2027 with much better revenue and profitability numbers than it did a year ago. Lumentum said its optical circuit switch business had a backlog exceeding $400 million during fiscal Q2. Additionally, it had received another multi-hundred-million-dollar co-packaged optics order scheduled for delivery in the first half of calendar 2027. And the company is still pushing into next-generation optical architecture.
By 2029, if Lumentum’s CPO and NPO AI interconnect applications, optical circuit switching, and higher-speed optical connectivity become increasingly common in AI infrastructure, that could create a much stronger story for the company. Even CNBC's “Mad Money” host Jim Cramer believes optical names such as Lumentum had a “long runway ahead.”
While Lumentum’s valuation at 42x forward earnings looks demanding, its earnings growth seems to justify it. Analysts project EPS to jump nearly 150% to $21.67 in fiscal 2027 and rise another 59% to $34.52 in fiscal 2028.
Overall, LITE stock holds a consensus “Strong Buy” rating, with 18 rating it as a “Strong Buy” of the 24 analysts covering the stock. Two analysts say it is a “Moderate Buy,” while four rate it a “Hold.”
AI Stock #3: Applied Digital (APLD)
Valued at $7.9 billion, Applied Digital builds and operates large-scale data centers designed to provide the computing infrastructure AI workloads require. This gives investors exposure to another part of the AI infrastructure chain. Applied Digital stock has risen 2% YTD.
The company reported a 167% YoY increase in fiscal 2026 revenue to $611.3 million. Applied Digital also reported adjusted net income of $36.1 million, compared to an adjusted net loss of $12.5 million in fiscal 2025. Applied Digital has signed long-term leases covering about 1,410 megawatts of contractual essential IT load across five campuses. The company said those leases represented roughly $36 billion of contracted revenue over their initial 15-year tenure, with the potential for an increase to over $86 billion if all renewal options are exercised.
If Applied Digital can bring its contracted campuses online as planned, its long-term case will strengthen. The company is still in the growth phase, which involves heavy investments. Its story going forward is about scaling contracted AI data center capacity and converting that expansion into sustained GAAP profitability.
On Wall Street, APLD stock holds a consensus “Strong Buy” rating. Of the 16 analysts covering the stock, 12 rate it a “Strong Buy,” one says it is a “Moderate Buy,” two rate it a “Hold,” and one says it is a “Strong Sell.”
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.