The veteran Fortune 500 CEO who turned an 80-year-old AC company into an AI darling

If asked to name the top-performing stocks powered by the AI boom, most investors would probably guess Nvidia (correct), maybe Meta (wrong) and a bunch of other hyperscalers (also wrong).

You’d be hard pressed to find anyone who would answer Vertiv , an 80-year-old AC maker.

But since Vertiv went public in early 2021, its market cap has exploded almost 10x from under $11 billion to $109 billion.

Over that six-and-a-half year span, its annualized return of 50.5% stands third in the S&P 500, exceeded only by Comfort Systems (55.2%) and Nvidia (54.9%).

And the story gets better from there.

The man responsible for this unlikely turn of events is a retired industrialist who almost didn’t take the job.

Back in 2019 David Cote was looking for a new project.

He had just retired from an illustrious career running Honeywell , where he engineered a spectacular revival after a failed acquisition by GE left the industrial giant rudderless.

But he felt like he had another chapter left in him.

So he brokered an unusual arrangement with Goldman Sachs: they’d present Cote with lots of acquisition candidates, and raise the funding once he found a choice that the investment bank also favored.

Cote’s an ace at spotting overlooked comers; he’d bought over 100 companies at Honeywell, deals that substantially quickened its expansion and enhanced its profitability.

In fact, Cote was looking for enterprises that met the same criteria that he’d successfully applied at the aircraft and auto equipment maker.

The target would need to occupy a dominant or potentially dominant position in an industry that’s either fast-rising and profitable now or en route ; promise plenty of room to grow both internally and through takeovers; stand rife for expanding margins; and perhaps most important, offer the opportunity to forge a sector-leading new technology.

“I had weekly phone calls with the Goldman group, and we looked at over 1,000 companies, and it was Goldman that found them,” recalls Cote.