The modern digital revolution began in the early 1990s with the widespread adoption of the desktop personal computer (PC), first by businesses and subsequently by individuals. By the dawn of the 21st century, the popularity of PCs had fueled the meteoric growth of the internet — then known as the World Wide Web — and facilitated the transformation of the world’s communication systems from analog to digital technologies.
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The Rise of the Digital Economy
High-speed digital communications technology has continued to evolve at an incredible pace. Today, thanks to global fiber-optic cable networks, high-speed microwave links and instant satellite communications, our world is more connected than ever. Anyone with an internet connection can communicate with almost anyone else, and practically at the speed of light.
For more than 35 years, we’ve been using computer technology and the internet to do business and to socialize with one another, and the pace of innovation and new applications is only increasing. The digitization of our technology is manifesting in the digitization of our economy. Specifically, the continuing growth of the internet in emerging markets and via the Internet of Things, the ongoing transition of business platforms from on-premises to cloud-based solutions, blockchain and cryptocurrency adoption and — most recently and most significantly — scalable artificial intelligence, or AI, applications are all powerful drivers of the modern digital revolution.
The result is that data creation, data transmission and the need for data storage and retrieval systems is at an all-time high … and demand for these services is still growing. That’s where data centers come in.
What Is a Data Center?
Data centers are central locations or hubs where data is received, processed, transmitted and stored. Inside a modern data center are tens or even hundreds of thousands of rackmount, blade and mainframe servers, storage systems that can include direct-attached and network-attached systems, all-flash arrays and tape libraries, networking equipment such as switches, routers, load balancers and network interface cards, and transmission equipment like optical transceivers and photonic line systems.
The bottom line is that data centers are highly sophisticated, technologically advanced facilities that are critical components of the world’s digital infrastructure.
The Data Center Boom
Few investors or tech watchers would deny that we are in the midst of a data center boom, and that it’s due to all of the reasons mentioned above, and a few not mentioned, like 5G cellular technology and edge computing.
McKinsey & Company estimates that data center demand is growing at an annual rate of 33%, and that capacity demand will increase from around 100 gigawatts today to about 220 gigawatts by 2030. To meet this demand, the Magnificent Seven companies and many other major technology firms have committed to spending over $1 trillion on new data centers in the coming years.
Data Center Stocks
The ongoing data center boom is good news for publicly traded companies in the digital infrastructure and data center industries. Such companies can include hardware companies that make computers and servers, microchip designers and manufacturers, software firms that design and sell operating systems, data center infrastructure management (DCIM) platforms and cybersecurity software and many more.
Not every stock is right for every investor, but the seven stocks on this list — which include stocks, real estate investment trusts, or REITs, and exchange-traded funds, or ETFs — represent a comprehensive mix of high-quality data center investments that every investor should consider owning.
| Data Center Equity | Market Value | Forward Dividend Yield as of July 29 close |
| Johnson Controls International PLC (ticker: JCI) | $69 billion | 1.4% |
| International Business Machines Corp. (IBM) | $243 billion | 2.6% |
| iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT) | $120 million | 1.4% |
| Digital Realty Trust Inc. (DLR) | $62 billion | 2.7% |
| Global X Data Center & Digital Infrastructure ETF (DTCR) | $339 million | 1.8% |
| American Tower Corp. (AMT) | $99 billion | 3.2% |
| Vertiv Holdings Co. (VRT) | $55 billion | 0.1% |
Johnson Controls International PLC (JCI)
Johnson Controls is a global powerhouse in the building solutions space, including solutions for the environmental control (cooling) of data centers. In recent years, this $69 billion company has pivoted to increase its focus on the serving the data center industry.
JCI engineers, manufactures, sells and services technologically advanced HVAC systems specifically tailored for data centers, high-tech commercial buildings and government facilities where sensitive computer equipment is housed.
Its data center cooling solution is called BlueStream. BlueStream is a system of hybrid cooling and Smart Connected Chillers specifically designed to handle the intense heat that AI-driven servers and data center workloads generate. The company claims that BlueStream can save data center operators up to 30% in energy costs.
As of July 29, the stock had appreciated 30.8%, year to date. JCI has a forward dividend yield of 1.4%.
International Business Machines Corp. (IBM)
IBM is up 19.4% year to date as of the close on July 29. Part of that impressive performance can be attributed to its sales of its advanced Power Systems and Z-series mainframe servers to data center operators. Those two hardware and software solutions are built to handle intense workloads from AI, data analytics and cloud computing.
IBM is a $243 billion integrated technology solutions company with operations in North America, Europe, the Middle East, Africa and Asia. Its main operating divisions are Software, Consulting, Infrastructure and Finance.
The company’s software division is now almost exclusively focused on hybrid cloud computing and AI. Its consulting division designs and implements technology systems and solutions for its clients. The infrastructure segment sells, installs and services cloud-based servers and storage systems to data centers and other customers. Finally, the finance division designs and facilitates loans and payment plans for its clients who buy its products.
IBM currently pays a 2.6% dividend yield.
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iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT)
IDGT is a relatively small ETF that is worth any data center investor’s consideration. The fund has $120 million in net assets and an expense ratio of 0.41%.
IDGT is designed to track the performance of the S&P Data Center, Tower, REIT and Communications Equipment Index. That benchmark consists of 31 U.S. stocks in the data storage, processing, transmission and digital services industries. Key holdings include Crown Castle Inc. (CCI) and Cisco Systems Inc. (CSCO).
For the one-year period ending July 29, IDGT is up 18.3%. Additionally, the fund has a current forward dividend yield of 1.4%.
Digital Realty Trust Inc. (DLR)
Digital Realty is a premier digital infrastructure REIT with a market cap around $62 billion. The company operates in 25 countries around the globe — most prominently in the U.S., Germany, the United Kingdom, France and Brazil. In total, DLR controls more than 40 million square feet of data center space.
DLR is much more than just a landlord for tech companies. The truth is, this company is something of a tech company in its own right. DLR provides its clients with a comprehensive data center management software solution called PlatformDIGITAL. That state-of-the-art system delivers advanced data processing, high-capacity storage and on-demand retrieval and transmission of digital data.
DLR is a dependable income stock. The company pays a 2.7% dividend yield, and the underlying business is doing well, too: Analysts expect revenue to grow 8% in 2025 and another 11% in 2026.
Global X Data Center & Digital Infrastructure ETF (DTCR)
DTCR is a relatively new ETF that was launched in October 2024. Since its inception, the fund has gathered $339 million in net assets. As of July 29, the fund has turned in a performance of 16.2% year to date, which compares very favorably to the 8.3% appreciation of the S&P 500 index for the same period.
DTCR is a fairly aggressive fund, but very much worth considering by investors who understand and can accept some enhanced risk.
Global X describes its approach to management of this fund as “unconstrained.” What that means is it conducts its own research, will invest in companies of all market caps and is not afraid to invest in lesser-known stocks that it feels offer compelling value.
The fund has an expense ratio of 0.5% and boasts a current yield of 1.8%. If the data center and digital infrastructure industry continues to boom, this ETF should follow suit.
American Tower Corp. (AMT)
AMT is a $100 billion communications tower REIT that is making inroads into the data center space. AMT owns nearly 300,000 cell phone and data transmission towers in North America, Europe, Africa, Asia and Latin America. Those towers — which the company leases to mobile phone providers and the government — generate about $2.6 billion in rental income per quarter, and they are instrumental in transmitting data to and from data centers around the world.
Since 2023 AMT has been actively and directly expanding into the data center space. Through its subsidiary, CoreSite, the company owns 28 data centers in major markets, including Northern Virginia, Denver and Los Angeles. In an interesting and innovative move, AMT recently announced it has purchased the Denver Gas & Electric Building in Denver to convert that vacant building into a midsize, low-latency, carrier-neutral data center.
This REIT’s established tower infrastructure and commitment to expanding its data center presence should keep it at the forefront of the data center boom for years to come. The stock has a current dividend yield of 3.2%.
Vertiv Holdings Co. (VRT)
The excellent performance of VRT has been the talk of Wall Street for the last several years. VRT has appreciated 919% for the five years ending July 29, and is up an impressive 25.6% year to date as of that same date.
VRT is a $55 billion equipment and services company that caters to data centers. The company designs, manufactures, sells, installs and services all kinds of low-tech and high-tech equipment to data center operators and builders around the world. It can provide everything from racking systems and wiring to power management systems, environmental control systems and much more.
The company has many clients that are well-known to tech investors, but of special interest is its valuable strategic partnerships with Nvidia Corp. (NVDA) and Microsoft Corp. (MSFT). Both of those firms are key partners in the announced $500 billion Stargate data center initiative, which can only mean good things for VRT. The stock pays a small forward dividend yield of 0.1%.
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7 Best Data Center Stocks, REITs and ETFs to Buy Now originally appeared on usnews.com
Update 07/30/25: This story was previously published at an earlier date and has been updated with new information.
