The data center market is experiencing explosive growth, driven by rising demand for cloud computing, big data analytics and artificial intelligence (AI). This guide features 10 data center stocks that stand to benefit from this trend.
Global demand for data center capacity could more than triple over the next five years, according consultancy firm McKinsey. That also means that data center electricity demand could double by 2030, the Electric Power Research Institute projects.
Data center stocks include real estate investment trusts (REITs) that specialize in the sector, as well as chip-makers, infrastructure and electricity companies that are suppliers. Keep reading for our selection of the best data center stocks.
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The top data center stocks, at a glance
These 10 stocks all have strong growth potential, based on their earnings, their strength against competitors. They hail from a mixture of sectors exposed to data center growth:
- Nvidia (NASDAQ: NVDA): The chip company, based in Santa Clara, California, is the world’s largest company by market cap. Its shares have surged by more than 1,200% over the past five years, thanks the need for AI-capable chips for data centers.
- Vertiv Holdings (NYSE: VRT): The Columbus, Ohio, company provides data center infrastructure, including power management systems, cooling equipment, racks, enclosures, monitoring software, and prefabricated data center designs.
- Duke Energy (NYSE: DUK): The utility operates more than 300,000 miles of powerlines, the largest electric distribution system in the US. It expects data center load to grow to 10% of total commercial sales in 2028 from 3% in 2023.
- American Tower (NYSE: AMT): The Boston-based REIT owns cell towers and data centers in 22 countries, and has boosted its data center presence by buying CoreSite in 2021.
- Iron Mountain (NYSE: IRM): The REIT specializes in storage, both physical and digital, to help companies manage their data. The Portsmouth, New Hampshire-based company now has 1,350 data-center facilities in 61 countries.
- Constellation Energy (NASDAQ: CEG): The Baltimore, Maryland-based utility is the largest producer of clean energy in the US, and is seeing increasing demand for grid-supplied data centers and backup power generation for those facilities.
- Alibaba (NYSE: BABA): Based in Hangzhou, China, the company is known for e-commerce and technology. It’s also one of the largest makers of AI-ready chips for data centers. Its Alibaba Cloud unit operates data centers around the world.
- Equinix (NASDAQ: EQIX): The REIT, located in Redwood City, California, the heart of Silicon Valley, owns and operates more than 248 data centers in more than 71 metropolitan regions in 32 countries.
- Schneider Electric (OTC: SBGSF): The Rueil-Malmaison, France-based industrial technology company provides products and expertise for electrification, automation, digitization, smart infrastructure, and data centers.
- Digital Realty Trust (NYSE: DLR): The REIT owns, operates and invests in carrier-neutral data centers across the world. The company, based in Austin, Texas, owns and operates more than 300 data centers across six continents.
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- Show Full Guide
These 10 stocks on our list are worth looking at because of their strong growth potential, revenue growth and profitability.
Some of them are data center REITs while others indirectly benefit from the growth of data centers. Here’s a little more detail on our top stocks:
1. Nvidia (NVDA): The chipmaker’s surge isn’t likely to be over just yet
After a lull to start the year, Nvidia is now back in the spot as the world’s largest company by market cap, and its shares are up more than 31% so far this year. The chipmaker keeps surprising analysts with its improved earnings, thanks to the growth of artificial intelligence (AI).
It has shored up its dominance in the space with several partnerships recently, including a $40 billion deal with BlackRock and Microsoft to acquire Aligned Data Centers, which allows Nvidia and its partners to expand next-generation cloud and AI infrastructure.
The move comes following a $100 billion agreement in September with OpenAI to add at least 10 gigawatts of data center computing power.
The company’s dominance is due mainly to its superior graphics processing units (GPUs). The company is in a good position because its GPUs are crucial for the growing sector of physical AI, such as robots, cars and other autonomous machines.
In the second quarter of fiscal 2026, revenue rose 56% year over year to $46.7 billion. This was led by data center revenue of $41.1 billion, growing 56% from a year earlier. EPS rose 61% year over year to $1.08.
The company operates in four segments: Data Centers, Automotive and Robotics, Professional Visualization, as well as Gaming and AI PC. While data centers, as noted, had a big increase, Automotive jumped 69% over the same period a year ago, and the Gaming and AI PC division saw sales rise 49% year over year.
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2. Vertiv Holdings (VRT): Orders are back on the rise
Vertiv is a supplier to data centers, sort of a pick-and-shovel AI data center stock. It makes hardware, software, analytics and ongoing services used by data centers in more than 130 countries. The stock is up more than 46% this year.
Vertiv’s power cooling systems and infrastructure aren’t much affected by the Trump administration’s tariffs because they are mostly made in the US.
In the third quarter, Vertiv saw EPS rise 63% year over year to $1.02, while revenue jumped 29% to $2.68 billion. The reason for the strong report was simple, as it saw a 60% increase in orders from a year earlier.
Vertiv also raised its full-year guidance. It said it expects adjusted diluted EPS to rise to $4.10 at the midpoint from $3.80 and for adjusted free cash flow to increase to $1.5 billion at the midpoint from $1.4 billion.
Vertiv’s quarterly dividend only yields around 0.09%, but the company increased it by 50% last year to $0.375.
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3. Duke Energy (DUK): Dominant power player poised for growth in demand from data center operators
Duke Energy’s electric utilities serve 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and its natural gas utilities serve 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.
Duke’s shares are up more than 20% this year and the company expects that economic development from data centers and advanced manufacturing will drive long-term growth.
The company has backpedaled a bit on its green energy plans as it recently said it plans to continue burning coal for four more years than originally planned. Duke cited the Trump administration’s fossil fuel energy policy and the state’s growing energy demand, driven by data centers and large manufacturers, for the turnaround.
A white paper by the Electric Power Research Institute says that, by the end of the decade, North Carolina’s data centers could increase by 77% to 370%.
In the second quarter, the company’s EPS rose 10.6% year over year to $1.25, while revenue was $7.5 billion, up 4.6% compared to the second quarter of 2024.
Duke also reiterated its full-year guidance. It expects an adjusted EPS range of between $6.17 and $6.42, and a long-term adjusted EPS growth rate of 5% to 7% through 2029, compared with the 2025 estimate’s midpoint of $6.30.
Duke has an excellent dividend that yields 3.33%. It raised its quarterly dividend by 2% in 2025 to $1.065, the 14th consecutive year it has increased its dividend.
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4. American Tower (AMT): Using cell towers to its advantage
American Tower is primarily known for owning and operating cell towers, but it’s increasingly involved in the data center business and is focusing on what it calls “edge data centers” located near its cell tower sites.
That allows it to provide comprehensive communications infrastructure for companies that need data center space. It currently operates 29 data centers in the US.
In the second quarter, the REIT saw revenue rise 3.2% year over year to $2.63 million. However, adjusted funds from operation (AFFO) per share, a metric REITs use to show profitability, dropped 6.8% to $2.60.
That’s partly due to the company’s expansion plans, as it spent roughly $185 million in acquisitions during the quarter, much of it from a multi-tenant data center in Denver.
Thanks to its ownership of roughly 149,000 cell towers, it has plenty of land surrounding those towers that can be used for future data center development.
AMT’s shares are up 5% this year despite the conservative guidance. For fiscal 2025, it’s predicting property revenue of between $10.135 million to $10.285 million, rising 2.8% at the midpoint. It sees AFFO per share climbing 0.2% at the midpoint to between $10.46 and $10.65.
The company raised its quarterly dividend by 4.9% this year to $1.70 per share, which equals a yield of around 3.53%. The AFFO payout ratio for the dividend is 65.3%, within the safety guideline for a REIT, which is expected to pay out 90% of its taxable income in dividends.
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5. Iron Mountain (IRM): Moving into a more profitable area
Iron Mountain is known for its records protection, but it’s increasingly becoming a data center stock as it’s providing digital storage for its more than 240,000 customers across 61 countries.
The transition from physical to digital storage has forced the company to spend more in recent years, but the investment appears to be paying off.
The stock is down more than 2% so far this year, but in April, the company was awarded a digital transformation contract with the US Treasury Department, which could be worth $140 million. The company indicated in June the contract could be expanded.
In the second quarter, the company posted record numbers. Revenue was $1.7 billion, up 11.6% over the same year-earlier period. AFFO per share rose 15% was $1.24.
The improved numbers led the company to increase its full-year guidance. It says it expects full-year AFFO to be between $5.04 and $5.13, up 12% at the midpoint, and revenue of between $6.79 billion and $6.94 billion, again, up 12% from the previous year.
Iron Mountain also has one of the best dividends of data center REITs. It raised its quarterly dividend by 10% this year to $0.785 per share, meaning a yield of around 3.01%.
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6. Constellation Energy (CEG): The star of clean energy for data centers
The rising demand for energy due to increased data centers brings Constellation into greater focus as the company is the largest producer of clean, emissions-free energy in the US. Its shares are up more than 54% so far this year.
Constellation, in June, signed a 20-year Power Purchase Agreement with Meta for the full output of the Clinton Clean Energy Center to support Meta’s clean energy goals and operations.
Constellation’s pending $16.4 billion acquisition of Calpine, a private natural gas and geothermal company, will make the company the largest independent US power producer and gives it a greater footprint in the West and Texas. The deal has already received federal and state regulatory approvals.
Constellation said the move will add more than 20% to its EPS by 2026 and at least $2 per share through 2029.
In the second quarter, Constellation saw EPS rise by 3.4% year over year, and revenue jumped by 11.4% to $6.101 billion.
The company reiterated its 2025 forecasts for adjusted operating EPS of $8.90 to $9.60 a share.
The company has increased its quarterly dividend for 10 consecutive years, including a 10% bump this year to $0.39 per quarterly share, a yield of around 0.43%.
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7. Alibaba (BABA): Plenty of reasons for long-term optimism
Tariff concerns are hitting some Chinese stocks, but Alibaba isn’t one of them. The technology company, which has tentacles in e-commerce, retail, Internet, and technology, has seen its shares climb more than 94% so far this year. It has its own AI chips, AI models and is a big player in cloud computing.
China is looking to pivot away from using Nvidia’s AI-powered chips and that helps Alibaba. Telecom firm China Unicom plans to use Alibaba’s AI accelerators from its semiconductor unit called Pingtouge or T-Head, according to China state broadcaster CCTV.
Alibaba does not sell its AI chips, but companies that use its cloud services benefit from its semiconductors. Despite Alibaba’s share growth this year, it still attractively trades at less than 20 times earnings.
In the second quarter, the company reported revenue of $34.6 billion up 2% year over year. EPS rose 82% to $0.31. The company’s fastest growing segment is its Cloud Intelligence Group, which reported revenue of $4.66 billion, up 26% year over year.
Two other reasons to consider Alibaba is it has a dividend that yields around 0.63%, and in the second quarter, it spent $815 million on stock buybacks.
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8. Equinix (EQIX): Consistent growth, consistent dividend, third quarter Oct. 29
Equinix’s shares are down more than 12% this year. However, it’s worth noting that the data center REIT has a strong history of revenue growth.
The company serves 73 markets across 34 countries and continues to expand its international presence. It has 59 major projects underway in 34 metros across 25 countries. It also nine new projects since last quarter across Bangkok, Chennai, Chicago, Dallas, Jakarta, Kuala Lumpur, London, Montreal and Silicon Valley markets.
The company just opened its first International Business Exchange data center in Chennai, India — CN1. The new facility will be interconnected with Equinix’s Mumbai campus, which consists of three IBX data centers.
In the second quarter, the company reported revenue of $2.256 billion, a 4% increase year over year. EPS was $3.75, up 19% year over year, and AFFO per share rose 11% to $9.91, up 11%.
The continued strong numbers led it to increase full-year guidance. It boosted its revenue estimate by $58 million to between $9.233 billion and $9.333 billion, an increase of 6.5% at the midpoint. It also boosted its full-year AFFO per share by $0.31 to between $37.67 and $38.48, a jump of between 10% and 13%.
The company’s consistency extends to its quarterly dividend, which it raised this year by 10% to $4.69, the 10th consecutive year it has increased its dividend. It currently delivers a yield of 2.28%.
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9. Schneider Electric (SU.PA): Plugged in to expansion of the data center market
Schneider Electric makes hardware and software for everything electrical used by data centers, such as breakers and outlets, and sophisticated cooling systems. Like Vertiv, it’s a great pick-and-shovel AI data center play because it makes so many products used by data centers.
The company is partnering with NVIDIA and EcoDataCenter to build an advanced AI factory for DeepL, a translation platform, with over 4,000 GPUs running on Schneider Electric’s high-performance infrastructure.
In the first half, it reported revenue of €19.3 billion, up 6.4%, year over year. Net income rose to €19.1 billion, up 2% compared to the same period last year. Its shares are up a little more than 2% so far this year.
The company also boosted full year organic projections, saying it expected adjusted earnings before interest, taxes and appreciation (EBITA) to be between 10% and 15% and revenue growth to be between 7% and 10%.
It also continues to grow through acquisitions. It is in the midst of finalizing a deal to buy out the remaining 35% stake of Schneider Electric India Private Limited from Temasek for €5.5 billion. I
Schneider’s shares are up more than 16% so far this year. It raised its annual dividend by 11% to €3.90 per share, delivering a yield of around 1.03%. It’s the 15th consecutive year it has increased its dividend.
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10. Digital Realty (DLR): Data center stocks with strong balance sheet, above-average dividend
Digital Realty is the largest global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions and the sixth-largest REIT in the US by market cap. It owns more than 300 facilities in 50 metro areas in 25 countries, including every continent except Antarctica.
The company, the fourth-largest publicly traded US REIT, has seen its shares drop a little more than 3% this year. It’s developing hyperscale and smaller colocation spaces.
Digital Realty owns large amounts of the third-party data center capacity in key AI markets such as Northern Virginia and Chicago —where there is little new power available. That means Digital can easily raise prices on its leases. Rental rates on renewal leases signed during the third quarter increased 11.5%.
Revenue rose 10% during the quarter from a year earlier to $1.6 billion, while core FFO rose 14.5% to $1.89.
The company also raised its full-year guidance. It now expects revenue of between $6.025 billion and $6.075 billion, up 1.2% at the midpoint over its earlier estimates. It also said it now expects full-year core FFO to be between $7.32 and $7.38, up 4.2% at the midpoint from the last forecast.
Digital Realty remains a solid investment. It has delivered consistent revenue growth and reduced its debt load. In addition, as the competition for data center space is expected to grow, the company is in a strong position to negotiate lease pricing.
It also has an above-average dividend that yields 2.85%, and has a core FFO payout ratio of 64.5%, plenty safe for a REIT. The company has increased its dividend by 56.4% since it instituted one in 2013 and has never cut its dividend.
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Year-to-date performance of the data center stocks in 2025
| Ticker | Company | Performance (YTD) |
|---|---|---|
| NASDAQ: NVDA | Nvidia | +31.83% |
| NYSE: VRT | Vertiv Holdings | +46.82% |
| NYSE: DUK | Duke Energy | +20.55% |
| NYSE: AMT | American Tower | +5.26% |
| NYSE: IRM | Iron Mountain | -2.56% |
| NASDAQ: CEG | Constellation Energy | +54.74% |
| NYSE: BABA | Alibaba | +94% |
| NASDAQ: EQIX | Equinix | -12.68% |
| OTC: SBGSF | Schneider Electric | +2.86% |
| NYSE: DLR | Digital Realty Trust | -3.95% |
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The growth drivers of data center stocks
Cloud service providers (CSPs), including Amazon Web Services, Google Cloud, Microsoft Azure, and Baidu are fueling most of the demand for AI-ready data centers. The next trend, however, is individual companies will want more of their own AI storage capacity on private servers.
The different ways of investing in data centers
Co-location companies, such as Digital Realty and other data center REITs, have a strong position in the market. Hyperscalers need them to meet fast-growing demand, and smaller enterprises depend on their specialist services. However, there are other, less-obvious ways to invest in data center growth.
Suppliers of renewable energy, including utility companies such as Constellation or Duke Power, stand to benefit because hyperscalers such as Google and Amazon have pledged to use carbon-free energy.
Similarly, investors exploring future tech trends might also consider web3 stocks, as companies driving blockchain, decentralized networks, and digital infrastructure often intersect with data center expansion and evolving energy needs.
Makers of GPUs that are used in data centers, such as Nvidia, are seeing very strong demand for their products, and companies that keep data centers running, such as Vertiv or Schneider Electric, benefit as well from data center growth – making them attractive opportunities for those who also explore signal services for stock trades.
What’s driving the growth of data centers?
It’s not just AI. There are several factors that are driving the need for more data centers and other companies that help support them:
Cloud Computing: The shift towards cloud-based services is a major driver of data center demand.
Artificial Intelligence (AI): AI applications require massive amounts of data and processing power, which data centers provide.
Internet of Things (IoT): The growing number of connected devices generates vast amounts of data that need to be stored and processed.
Digital Transformation: Businesses across all industries are increasingly relying on digital technologies, which require robust data center infrastructure.
Pros and cons of data center stocks
Investing in data centers offers a chance for investors to diversify their portfolios with a fast-growing sector that offers the potential for significant returns. However, data center stocks have their own set of challenges.
The enthusiasm for AI and what its growing need means for data centers has lifted the valuations of many data center stocks, including those of chipmakers, electrical companies, and utility companies that provide the energy for data centers – making them increasingly comparable to how investors evaluate tech stocks for long-term growth potential.
Data centers require a high level of investment and face the concerns of technological obsolescence, as well as regulatory and environmental risks. Therefore, investors should carefully examine the pros and cons – and even consider stocks under $10 – to decide whether investing in data centers and related stocks is the right choice for them.
Some of the benefits of investing in data center stocks
Surging demand: The digital revolution fuels explosive growth in data storage and processing, driving a robust market projected to reach substantial value. This growth, propelled by cloud computing, big data, and IoT, creates significant investment potential for stocks related to data centers, including those that supply data centers.
Consistent income: Long-term leases with creditworthy tenants provide stable, predictable cash flow, minimizing risk and offering reliable returns for data centers.
Portfolio diversification: Data centers and data center-related companies offer a unique asset class, distinct from traditional real estate, reducing overall portfolio risk and enhancing potential returns, especially during economic fluctuations.
Tax incentives: Depreciation deductions and potential credits for energy efficiency and renewable energy can significantly improve investment profitability.
Some of the drawbacks of purchasing data center stocks
Overvaluation: The enthusiasm regarding what the AI boom means for data center-related stocks has driven up the prices of many stocks.
Significant capital outlay: High initial and ongoing operational costs, including advanced infrastructure, energy consumption, and security, can create barriers to entry and impact profitability.
Rapid technological change: The need for constant upgrades to keep pace with evolving technology necessitates continuous investment and can pose a risk of obsolescence.
Environmental and regulatory concerns: High energy consumption raises environmental concerns and regulatory scrutiny, requiring strict compliance and potentially impacting operational costs.
Increasing competition: Market saturation and growing competition among investors and operators can make it challenging to secure profitable opportunities. This is true for data center REITs as well as with chipmakers and other data center suppliers.
If you’re exploring infrastructure-heavy tech investments, it may also be worth considering High-potential blockchain stocks that offer exposure to next-gen digital ecosystems with a different risk-return profile.
Pros
- Surging demand
- Consistent income
- Portfolio diversification
- Tax incentives
Cons
- Overvaluation
- Significant capital outlay
- Rapid technological change
- Environmental and regulatory concerns
- Increasing competition
Are there any data center ETFs?
Yes, and they provide a way of investing in data centers without the risk of investing in just one or two companies. Here are three ETFs that provide exposure to the data center sector:
Global X Data Center & Digital Infrastructure ETF (DTCR): It targets companies involved in data center operations and digital infrastructure. It offers exposure to data center REITs, as well as companies that provide the necessary infrastructure and connectivity.
Global X Cloud Computing ETF (CLOU): This ETF provides exposure to companies involved in cloud computing, which heavily relies on data center infrastructure. It includes companies that offer cloud-based software, platforms, and services.
Pacer Data & Infrastructure Real Estate ETF (SRVR): It focuses on real estate companies that are involved in data and infrastructure. So, this ETF gives you a more REIT focused exposure to the data center industry.
How We Rate Stocks
We review each stock that is selected. Below are the key metrics we check before listing stocks on the website. For further details, you can also take a look at our stocks rating guide, featured on ValueWalk.
Balance sheet
Potential Growth
Competitiveness
Liquidity
FAQs
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References
Nvidia, partners to buy Aligned Data Centers
Nvidia second-quarter earnings
EPRI data on data center power needs
Duke second-quarter earnings report
American Tower second-quarter earnings
Iron Mountain second-quarter earnings
Constellation Energy first-quarter earnings
Global companies pledge support for nuclear power
Alibaba second-quarter earnings
Equinix second-quarter earnings
Schneider Electric first-half earnings
Digital Realty Trust third-quarter earnings
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