Morgan Stanley analysts on Thursday argued that the shortfall in Vertiv Americas' data center revenue relative to U.S. gigawatt capacity additions stems primarily from timing mismatches in deployment rather than from widespread losses of market share. The bank expects this disparity to moderate over the next several years.
The analysts highlighted that U.S. annual gigawatt additions for 2026 are tracking at roughly 10 times the 2018-19 level, while Vertiv Americas' revenue over the same span has expanded by only about four times. Morgan Stanley noted this pattern of a revenue buildout lag appears across the firms it covers with exposure to data center markets.
Examining demand dynamics, the bank said U.S. industrial suppliers selling into data centers experienced roughly 30% growth in 2023-24, with that pace accelerating to about 55% in 2025-26. Morgan Stanley characterized 2023-24 as the period when the true artificial intelligence inflection took hold, following earlier gains tied to pandemic-era cloud spending.
On the supply side, equipment providers have trailed the pace of the gigawatt buildout. Morgan Stanley reported that annual dollar per gigawatt measures hit a trough in 2023-24 at the outset of the capital expenditure upswing, and have since begun to improve. Still, the bank observed that leading edge dollar per gigawatt metrics remain below 2018-19 levels, which it interprets as indicating room for U.S. industrial revenue to outgrow gigawatt additions in 2027-28.
The analysts pointed to two additional considerations beyond timing. First, as the market became undersupplied, some data center industry leaders have likely ceded market share, a development Morgan Stanley views as creating opportunity over the next five years for industrial players such as Vertiv, Eaton, Trane Technologies and Johnson Controls. Second, not all industrial revenue tied to data centers is correlated with new gigawatt capacity; maintenance and replacement sales are driven by installed base growth, which typically advances more slowly than annual gigawatt additions.
Using disclosures from Vertiv's four investor days since 2019, Morgan Stanley estimated that expansion, project revenue and startup services now constitute about 80% of Vertiv's sales, up from roughly 60% in the pre-pandemic period. These revenue categories reportedly lagged the gigawatt buildout by about 50% in earlier years but showed recovery in 2025-26.
Regarding Vertiv's positioning, the analysts concluded the company is both trailing the overall buildout and simultaneously capturing share within the data center ecosystem as capacity additions tilt toward high-density AI workloads where Vertiv has higher product content. Morgan Stanley's calculations suggest Vertiv's 2030 target implies Americas data center revenue about 10 times 2018-19 levels, while industry gigawatt forecasts point to roughly 20 times growth over the same timeframe.
Finally, Morgan Stanley listed its preferred data center-related industrial stocks as those with deep ties to the industry leaders shaping future architecture, naming Vertiv, Eaton, Trane Technologies and Johnson Controls as best positioned to benefit from these trends.
Note: The article presents Morgan Stanley's assessment and projections as reported by the bank.