The rapid expansion of the internet and internet-connected devices, the growth in cloud computing, and the proliferation of artificial intelligence, or AI, platforms consume a tremendous amount of computing power and generate massive amounts of data daily. And, that’s to say nothing of cryptocurrency mining and blockchain functions, which have their own computing and storage capacity needs. All of this falls under the general categories of digital communications, high-speed computing and data management. All of it needs extensive digital infrastructure to function.
[Sign up for stock news with our Invested newsletter.]
Digital infrastructure means all the materials and resources necessary to keep our worldwide communications and computing networks functioning. It includes everything from real estate to fiber optic cables, to advanced computers, antenna towers, servers, switches, software, power plants, microchips, air conditioning units and more. Much of our digital infrastructure is housed and maintained in centralized locations called data centers.
Data centers are specialized, high-tech facilities where the computers, computer servers, storage devices and networking equipment that connect our digital world are housed and maintained. They represent the heart of the digital world and are critical to all aspects of modern digital communication, including e-commerce, social media and digital entertainment streaming.
The global data center market is growing fast and showing no signs of slowing down. Most estimates project a compounded annual growth rate of around 12%, but some experts think that number is low. In any case, investors should pay attention to this important trend.
Here is an updated list of seven publicly traded companies that are poised to take advantage of the ongoing data center surge:
| Investment | Market Capitalization* | Forward Dividend Yield* |
| Equinix Inc. (ticker: EQIX) | $90.7 billion | 2.0% |
| Digital Realty Trust Inc. (DLR) | $58.4 billion | 2.8% |
| Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR) | $401.1 million** | 2.0% |
| Nvidia Corp. (NVDA) | $3.4 trillion | 0.03% |
| Southern Co. (SO) | $96.9 billion | 3.3% |
| Advanced Micro Devices Inc. (AMD) | $182.4 billion | N/A |
| Vertiv Holdings Co. (VRT) | $37.8 billion | 0.1% |
| Entergy Corp. (ETR) | $36.6 billion | 2.8% |
*As of Feb. 20 close.**Net assets.
Equinix Inc. (EQIX)
With a market cap that exceeds $90 billion, EQIX is the world’s largest data center colocation provider. It operates about 250 modern, high-tech facilities in the U.S. and globally. The company’s focus is on interconnection services tailored to meet the fast-rising demand for high-bandwidth, low-latency cloud computing and AI workloads.
EQIX is well-positioned to benefit from the data center boom that’s simultaneously happening in the real estate and tech sectors. The company holds an approximately 13% share of the colocation market, with a strong and expanding presence in metro areas.
On Feb. 13, Scotiabank, BMO Capital and Oppenheimer all reiterated the “outperform” ratings they maintain on the stock. EQIX is organized as a real estate investment trust, or REIT, which means that at least 90% of its taxable income will be distributed to shareholders as a dividend. The current yield on the stock is 2%.
Digital Realty Trust Inc. (DLR)
The second company on this list happens to be the second-largest REIT in the data center space. Digital Realty Trust has a market cap of close to $59 billion and operates over 300 server farms and data centers in 25 countries. In total, the firm controls almost 40 million square feet of valuable commercial space.
Investors should realize that this REIT does much more than rent buildings to tech companies. The company offers all of its tenants its comprehensive data storage, management and retrieval system PlatformDIGITAL. That advanced platform includes state-of-the-art hardware and the most technologically advanced software. It allows clients to process data, store it and retrieve it on demand.
DLR controls about 11% of the data center colocation market and routinely generates over $1.4 billion in revenue per quarter. This data center REIT has a current yield of 2.8%.
Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR)
SRVR is an ETF that was designed and launched in anticipation of the data center boom that the world is experiencing right now. The fund has net assets of $401 million and invests in data processing companies, data centers, mobile antenna tower firms and other stocks in the digital infrastructure space.
The portfolio managers seek out stocks with good price momentum in industries like cloud computing and high-speed, digital communications. REITs make up the majority of the fund’s holdings, but it is far from just a real estate fund. SRVR does not invest in emerging markets, but otherwise will invest in any quality stock that meets its criteria.
It isn’t an index fund, but SRVR does use the GPR 250 Index and the GRP Pure Infrastructure Index as benchmarks.
The expense ratio for this actively managed fund is 0.55%. The dividend yield is 2%.
Nvidia Corp. (NVDA)
Chipmaker Nvidia designs and manufactures the semiconductors and central processing units, or CPUs, that are essential for AI-driven data centers. In fact, the company is dominant in that critical, fast-growing market.
On top of its data center solutions, NVDA is an established leader in gaming graphic processing units, or GPUs, and deep-learning AI applications. It’s ahead of all of its competition in the engineering and manufacturing of the world’s most advanced and in-demand microchips.
Plus, the company has solid financial fundamentals. Revenue is strong and profitability has been consistent. NVDA has a market cap of more than $3 trillion. It’s not an income stock, but it does pay an annual forward dividend of 4 cents per share, resulting in a dividend yield of 0.03%.
Southern Co. (SO)
The southeastern U.S. has a well-earned reputation for being business-friendly, with a reasonable tax structure. These facts, along with low energy costs and an abundance of available real estate, are attracting data center projects from tech companies and real estate developers. Southern Co. is a regulated electricity utility that will benefit by providing reasonably priced power to new and existing data centers in its area of operation.
In addition to traditional power plants, SO owns and operates other power generation assets that include several renewable energy projects like hydro, cogeneration, solar and wind. The company sells virtually all the electricity in can produce. Any power not consumed by its regular customers is sold into the wholesale market and distributed by other utilities.
The company is gearing up for the anticipated data center surge by investing in pipelines, logistics, battery storage and related distribution areas. And it’s going to need all the capacity it can get: It’s estimated that data centers could drive 12% of electricity use by 2028.
SO has a market cap of around $97 billion and a current dividend yield of 3.3%.
[READ: 5 of the Best Companies to Invest In for 2025]
Advanced Micro Devices Inc. (AMD)
Advanced CPUs and GPUs are critical components of high-performance data center solutions. The $185 billion chip maker Advanced Micro Devices is slowly but surely gaining market share from its competitors in these areas, with Intel Corp. (INTC) arguably taking the biggest hit.
AMD is becoming a legitimate competitor even to the industry leader, Nvidia. Increasing data center workloads, especially in AI and the cloud, will benefit AMD and all major players.
The company’s premiere data center chip is its x86 microprocessor GPU. That advanced processor is getting good reviews and will be aggressively marketed to data centers, server farms, crypto mining operations and financial firms.
Vertiv Holdings Co. (VRT)
All existing and future data centers need to be air-conditioned 24 hours a day, seven days a week. That’s good news for Vertiv Holdings.
VRT is a data center services company with a market cap of $38 billion. Data center air condition systems are a large part of its business, but VRT offers many other products and services as well. For example, it designs and installs complex racking systems that allow efficient stacking and easy access to the thousands of servers that are the mainstay of modern data centers.
VRT already has established partnerships with major tech companies like NVDA and MSFT, so it has plenty of business in the pipeline. As the data center business and the tech industry in general expand, VRT is sure to benefit.
The company pays an annual forward dividend of 15 cents a share, which equates to a dividend yield of 0.1%.
Entergy Corp. (ETR)
Most tech investors have heard that Meta Platforms Inc. (META) is investing more than $10 billion to build an AI-focused data center in Richland Parish, Louisiana. The 4-million-square-foot facility is scheduled to be completed in 2030 and will be an important part of Meta’s AI infrastructure for many decades to come.
Fewer investors are aware, however, that Entergy is an important partner in the project. Entergy, through its subsidiary Entergy Louisiana, is building two natural gas power plants specifically to supply much-needed energy to Meta’s massive new data center. Final regulatory approval is expected in late 2025, and the plants will be up and running by 2028.
The Louisiana project is only part of Entergy’s large-scale strategy to meet the energy needs of the data center industry. As the digital infrastructure industry grows, ETR should follow suit.
Analysts at Wells Fargo believe the stock is somewhat undervalued. The firm has an “overweight” rating on the stock.
This $37 billion stock has a dividend yield of 2.8%.
More from U.S. News
What ETF Has the Highest 10-Year Return?
7 Best Investments During a Recession
7 High-Yield Covered Call ETFs Income Investors Will Love
8 Best Data Center Stocks, ETFs and REITs to Buy Now originally appeared on usnews.com
Update 02/21/25: This story was published at an earlier date and has been updated with new information.
