If you’ve been paying attention to the equity markets over the last few years, you know that many investments related to data centers — including stocks, exchange-traded funds, commonly called ETFs, and real estate investment trusts, or REITs — have been booming. The boom is a consequence of rapid technological advances, which are prompting consumers and businesses of all sizes to rely heavily on digital services and digital communications.
— What is driving the data center boom?
— Investing in data center stocks, ETFs and REITs.
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What Is Driving the Data Center Boom?
Artificial Intelligence (AI)
AI and machine learning exploded onto the investment scene in November 2022 when OpenAI released ChatGPT to the public. AI requires vast amounts of computing power and data storage. AI may be the biggest driver behind the current data center boom. The training and utilization of AI models demand an incredibly large number of high-performance servers and GPUs, and the growth of this segment of the technology industry is almost unprecedented. As AI continues to expand, the need for specialized data centers will only continue to intensify.
Cloud Computing
The shift from on-premises computing to cloud computing has skyrocketed since Amazon.com Inc. (ticker: AMZN) started Amazon Web Services, commonly called AWS, back in 2006. Since then, competitors like Microsoft Corp. (MSFT), Alphabet Inc. (GOOG, GOOGL) and International Business Machines Corp. (IBM) have launched their own cloud platforms and further accelerated the growth of the industry. Data centers provide the infrastructure that makes cloud computing work.
Expansion of the Internet
Increases in remote work, entertainment streaming, the internet of things, and handheld smart devices like cell phones and tablets are causing global internet usage to surge. Data centers support all these applications by storing user data and hosting content delivery networks.
Hyperscale Data Center Investing
Virtually all the Magnificent Seven tech giants have recently announced massive investments in hyperscale data centers and related technology. The total investment by these tech leaders will likely exceed $1 trillion over the next decade. They will be building large-scale data facilities, investing in related infrastructure and constructing microchip manufacturing facilities in the U.S. and around the world.
Investing in Data Center Stocks, ETFs and REITs
In one sense, all modern tech stocks are related to data centers. There is almost no technology today that isn’t based on high-speed digital communication and doesn’t create large amounts of data that needs to be processed, stored and retrieved on demand. That said, some securities are more directly associated with data centers than others. They include digital infrastructure ETFs that specialize in data centers and mobile cell towers and stocks of companies that manufacture microchips, data center software, specialized air conditioning units, vital data center components and other data center equipment.
The seven investments on the following list represent some of the best potential opportunities in the data center space. Investors interested in profiting from the unprecedented growth in data centers will want to review these securities carefully to see if one or more belongs in their portfolios.
| Equity | Type | Forward Dividend Yield | Market Capitalization/Net Assets |
| Global X Data Center & Digital Infrastructure ETF (DTCR) | ETF | 1.7% | $224 million |
| Digital Realty Trust Inc. (DLR) | Data center REIT and software provider | 2.9% | $58 billion |
| Pacer Data and Digital Revolution ETF (TRFK) | ETF | 0.4% | $54.5 million |
| American Tower Corp. (AMT) | Communications infrastructure REIT | 3.2% | $99 billion |
| Advanced Micro Devices Inc. (AMD) | Semiconductor manufacturer | – | $185 billion |
| Vertiv Holdings Co. (VRT) | Data center infrastructure and services | 0.1% | $41 billion |
| Equinix Inc. (EQIX) | Largest data center REIT | 2.1% | $86 billion |
Global X Data Center & Digital Infrastructure ETF (DTCR)
Global X launched DTCR about five years ago with the objective of profiting from the data center trend that was strongly emerging as a market driving force. This fund’s net assets have grown from about $90 million in August 2024 to almost $224 million today. That impressive increase in assets is due mostly to the growing confidence investors are showing in this relatively new fund.
DTCR uses what it calls an unconstrained approach to digital infrastructure investing, meaning it will invest in multiple industries and asset classes. The company will also invest in lesser-known companies that may not yet be household names.
The fund’s sponsor, Global X, estimates that the data center and digital infrastructure space will grow at about 10% a year for the foreseeable future. The fund will profit from that growth by investing in technology, mobile connectivity, AI, smart grid electric companies, cell towers and data centers.
With an expense ratio of 0.5%, DTCR is reasonably priced for an actively managed fund, but it can’t be considered a low-cost fund. The ETF has a forward yield of 1.7%.
Digital Realty Trust Inc. (DLR)
Most REIT investors are familiar with DLR. It’s a $58 billion company that owns and operates data centers in 25 countries around the world.
In addition to renting real estate to tech companies, DLR is a sophisticated software company. The company offers its flagship software suite, PlatformDIGITAL, to all its tenants. PlatformDIGITAL is a comprehensive hardware and software solution that manages data storage, processing and retrieval for tech companies, financial firms and communication networks.
Wall Street is looking for $5.9 billion in revenue from the company in 2025 and $6.5 billion in 2026. That represents 1.8% annual growth. Additionally, DLR has a forward dividend yield of 2.9%.
Citigroup, Jefferies and Truist Securities all have a “buy” rating on the REIT.
[Read: 7 Best Tech ETFs to Buy in 2025]
Pacer Data and Digital Revolution ETF (TRFK)
TRFK is a small $54.5 million rules-based index ETF that provides aggressive data center investors with exposure to global stocks, American depositary receipts, or ADRs, and what it deems revolutionary data center and digital infrastructure companies.
The fund’s objective is to track the performance of the Pacer Data Transmission and Communications Revolution Index after the expense ratio of 0.6% is subtracted. That benchmark focuses on stocks and ADRs in the data transmission, digital infrastructure, communications, and related software or services segments of the tech sector.
The fund is positioned to capture the exceptional growth that’s happening in the digital infrastructure industry, which is, of course, being driven by AI, cloud computing and 5G mobile technology. Investors should realize, however, that TRFK is a fairly aggressive fund that will be sensitive to stock market volatility and rising interest rates if and when they occur.
TRFK pays a small forward yield of 0.4%.
American Tower Corp. (AMT)
AMT is a $99 billion cellular communications tower and antenna REIT. It may seem counterintuitive to count a tower REIT as a data center investment, but the two industries are closely related. Cell towers are critical to the efficient functioning of data centers because so much of modern digital communications is wireless. As such, AMT’s more than 225,000 towers are responsible for sending and receiving much of the data that’s processed and stored in data centers around the globe.
In addition to towers and antennas, AMT is an owner and operator of individual data centers. The company owns close to 30 full-service data centers that are fully leased to technology and communications companies. Owning data centers is becoming an important part of the company’s overall business plan, and AMT is actively looking to expand its data center portfolio.
Because AMT is incorporated as a REIT, investors can expect a regular income dividend. AMT has a forward yield of 3.2%.
Advanced Micro Devices Inc. (AMD)
AMD is a $185 billion chip maker that engineers and manufactures CPUs and GPUs that compete directly with data center solutions offered by Nvidia Corp. (NVDA) and others. AMD’s x86 data center-centric microprocessor and Instinct GPUs are becoming very popular with financial firms and payment processors.
Chips, GPUs and CPUs are a big part of the data center story, especially considering that a good-sized data center of around 250,000 square feet will house 150,000 servers or more, and that the data centers being built by companies like Apple Inc. (AAPL) and others may eventually be twice that size.
The bottom line is that the chips and processors that AMD produces are vitally important to the data center industry, and AMD is becoming a powerful competitor in the space. AMD is gaining market share and should continue to do so.
Vertiv Holdings Co. (VRT)
VRT is a $41 billion company serving data centers and communications companies. It designs, manufactures, distributes and services a wide range of data center infrastructure products. For instance, VRT sells computer racking systems, power management systems, air-conditioning systems and communications networks that are specially designed for data centers and server farms.
VRT is emerging as a key player in the data center infrastructure and services market. It should continue to benefit from the global surge in AI, cloud computing, cryptocurrency and overall connectivity growth. The company operates a global service network that supports clients through every step of a data center’s lifecycle, from design to operation to maintenance.
If investors need assurance that VRT can work with hyperscale data center operators, they can look to the company’s strategic partnerships with Nvidia and Microsoft. Collaborations with those two industry leaders conclusively demonstrate VRT’s leadership position in this fast-growing segment of the tech sector.
Equinix Inc. (EQIX)
With $86 billion in market cap, EQIX is the largest data center REIT on the market and one of the biggest digital infrastructure companies in the world. EQIX leases full-service data centers to financial firms, digital payment platforms, health care companies, retailers, cloud computing firms and more.
On May 7, the company released its first-quarter 2025 earnings. It reported $2.2 billion in revenue, which was an 8% increase over the previous year and in line with Wall Street’s expectations. On the earnings front, it booked $3.50 in earnings per share, which beat analysts’ expectations of $2.97 by almost 18%.
Those results are a reflection of the fact that Equinix is one of the most trusted data center platforms in the industry. The company offers a complementary blend of real estate and software expertise, allowing its clients to scale their data operations and add value.
This premier data center REIT has a forward dividend yield of 2.1%.
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The 7 Best Data Center Stocks, ETFs and REITs to Buy Right Now originally appeared on usnews.com
