Despite headwinds created by erratic trade and tariff policies emanating from the White House, geopolitical tensions around the world and an uncertain economic outlook, the U.S. stock market has forged ahead nicely so far in 2025. As of Aug. 28, the broad market, as represented by the large-cap S&P 500 index, is up 10.6% year to date and continues to show positive momentum.
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So, what’s pushing stocks higher? There are two overriding themes acting as catalysts for this year’s stock market gains, and they are closely related to one another.
The first is the incredible and rising demand for artificial intelligence, or AI, applications by individuals, governments and commercial institutions. The second — largely driven by the first — is the unprecedented explosion in enterprise spending on data centers and the ancillary effects that data center boom is having on the rest of the economy.
Companies are increasing their data center spending so fast that it’s difficult to keep up with current estimates. Still, investors can expect capital expenditures, or capex, by the “Magnificent Seven” mega-cap tech companies to be between $385 billion and $598 billion in fiscal 2025. Looking beyond just the Magnificent Seven to include the entire tech industry, the Dell’Oro Group — an independent market research and consulting firm specializing in data center infrastructure — forecasts AI infrastructure capex reaching $1.2 trillion worldwide by 2029.
That kind of spending is bound to have huge knock-on effects on the U.S. and global economies. After all, building new data centers and upgrading old ones to handle AI involves the industrial sector, the materials sector, utilities, energy, defense companies, the real estate sector and, of course, the communications, information and technology sectors. In the final analysis, almost the entire market is — directly or indirectly — benefiting from the ongoing data center boom.
That said, some stocks, exchange-traded funds (ETFs) and real estate investment trusts, or REITs, are benefiting more than others. Generally, securities with a specific focus on AI infrastructure and data centers are doing better right now than those with indirect ties to those fast-growing industries. There are dozens of data center stocks, ETFs and REITs worth considering, but the seven highlighted below offer particularly timely opportunities in today’s market:
| Stock | Market Capitalization | Forward Annual Dividend Yield as of Aug. 28 |
| Modine Manufacturing Co. (ticker: MOD) | $7.1 billion | — |
| Eaton Corp. PLC (ETN) | $135 billion | 1.2% |
| Pacer Data and Digital Revolution ETF (TRFK) | $135 million* | 0.1%** |
| Equinix Inc. (EQIX) | $77 billion | 2.4% |
| Crown Castle Inc. (CCI) | $43 billion | 4.4% |
| Nvidia Corp. (NVDA) | $4.3 trillion | 0.02% |
| Microsoft Corp. (MSFT) | $3.8 trillion | 0.7% |
*Net assets, rather than market capitalization, is listed for this fund.**30-day SEC yield.
Modine Manufacturing Co. (MOD)
MOD was founded 109 years ago in Racine, Wisconsin, where the company still makes its headquarters. MOD is a world leader in thermal management (i.e., heating and cooling) solutions, which are critical to the data center industry.
The company’s Airedale by Modine-branded products are exactly the kind of state-of-the-art precision air conditioning and liquid cooling systems required for high-density data centers. The data center boom has kept Modine’s energy-efficient products in high demand and should support sustainable growth for the company over the foreseeable future.
In addition to data centers and other high-performance computing facilities, Modine’s advanced heat transfer and cooling technologies are used extensively in the automotive industry, agriculture and the construction industry. This is a global company with operations across North America, Europe and the Asia Pacific Region.
Eaton Corp. PLC (ETN)
ETN is a 114-year-old, $135 billion company that is based in Dublin, Ireland. Its U.S headquarters are in Beachwood, Ohio. The company is a premier provider of power management solutions that drive operational efficiency and sustainability for energy-intensive industries like data centers and others.
ETN engineers, sells and services advanced electrical, hydraulic and mechanical power management systems for AI infrastructure firms — including data centers and server farms — as well as the aerospace industry, the commercial automotive industry and more.
Eaton’s uninterruptible power supplies (UPS), smart power distribution units and energy-efficient electrical control systems are particularly attractive to data center hyperscalers like Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG, GOOGL), because they support the high-density power infrastructure these companies depend on.
Pacer Data and Digital Revolution ETF (TRFK)
TRFK is a data center and digital infrastructure ETF with $135 million in net assets. Due in large part to the data center boom, this fund is up 25% year to date as of Aug. 28 and more than 30% for the prior 12-month period.
TRFK is designed to track the Pacer Data Transmission and Communication Revolution Index. TRFK has an expense ratio of 0.49%, and has a modest 30-day SEC yield of 0.1%.
TRFK is not strictly a quantitative ETF, but it is a rules-based, cap-weighted fund. Its portfolio consists of listed stocks and American depository receipts, or ADRs, of companies that derive at least 50% of revenue from data-related activities. Such activities include data transmission, networking, broadband services, semiconductors, software, data storage, cloud computing infrastructure, electrical components and data-centric industrial machinery. In other words, this ETF invests in companies and technology that are central to the data center industry.
Equinix Inc. (EQIX)
EQIX is far and away the largest data center REIT in the world. The company has a market cap of $77 billion and operates more than 260 data centers globally in 71 markets. This includes colocation facilities and xScale hyperscale data centers in 33 countries in North America, the EMEA countries — Europe, Middle East and Africa — and the Asia-Pacific Regions.
The company has 59 major projects underway. Specifically, it is adding large amounts of capacity in São Paulo, Tokyo and Frankfurt. Equinix’s diverse tenant base includes cloud computing platforms, financial firms, online retailers, insurance companies and tenants from other technology-dependent, data-driven industries.
The stock has faced pressure on several fronts including higher-for-longer interest rates, sticky inflation and its debt load. These factors have resulted in underperformance even in the midst of the boom in data centers in general. The company believes the stock has been stagnating because it’s expending large amounts of capital on top-line rather than bottom-line growth, including xScale expansion and the transition to AI readiness across all of its facilities. This has caused near-term dilution in adjusted funds from operations (AFFO) but, if all goes well, will position the company for double-digit growth in the future.
EQIX has a current dividend yield of 2.4%.
Crown Castle Inc. (CCI)
CCI is a mobile communications tower REIT with a market cap of $43 billion. It owns and operates more than 40,000 cellular communication tower sites and an additional 90,000 miles of fiber-optic cable infrastructure that’s used to support its telephone pole and street light-mounted antenna network. CCI is a domestic company with all of its assets located in the U.S.
America’s tower and antenna networks are critical to the data center boom and the AI revolution. This is because the majority of the data transmitted to and from data centers travels over the air and is facilitated by powerful receivers and antennas atop tall cell towers that are spread across the landscape from coast to coast.
Wall Street estimates CCI will generate more than $1 billion a quarter for the foreseeable future; CCI currently pays a 4.4% dividend yield.
Nvidia Corp. (NVDA)
When Nvidia released its financial results for its fiscal 2026 second quarter after the bell on Aug. 27, Wall Street was a little disappointed with the amount of revenue the company generated from its data center clients. Analysts had estimated $41.3 billion in data center revenue, but the company reported $41.1 billion, a slight miss.
One person who was not disappointed, however, was Nvidia’s CEO Jensen Huang. Huang blamed the shortfall on trade restrictions with China, an issue that he hopes will be resolved soon. In fact, when asked to characterize data center demand during a post-earnings video interview with Yahoo Finance, the company’s chief executive responded: “Incredible. Incredible. We obviously had a record quarter without China and we just guided another record quarter without China.” In other words, despite what Wall Street might think, Nvidia believes the data centers will continue to generate record-setting revenue for the company.
Nvidia is a $4.3 trillion global leader in designing high-speed graphics processing units, or GPUs, semiconductors and microchips that power modern AI-powered data centers, high-speed digital computing and advanced gaming. It’s widely believed in the tech industry that Nvidia’s chips and processors are best-in-class when it comes to digital communications and advanced data processing.
NVDA is not an income stock by any means, with a dividend yield of 0.02%.
Microsoft Corp. (MSFT)
Today’s list wraps up with a mega-cap stock that’s a premier player in the data center space. Microsoft’s data center involvement stems from its Azure global cloud computing platform, which requires a tremendous amount of digital infrastructure to function.
MSFT operates more than 300 data centers in 60 regions across the world. That’s the most of any cloud provider, even Amazon’s AWS. These data centers are critical to Microsoft’s overall ecosystem, which includes Microsoft 365, Dynamics 365 and Microsoft Copilot AI.
MSFT serves millions of individual computer users and more than 350,000 organizations, including 425 of the Fortune 500 companies, and almost all of that business is dependent on the company’s huge network of data centers. In short, advanced data centers drive revenue growth and provide the company with a competitive advantage in the cloud, digital communications and data processing businesses.
In addition to Azure, MSFT designs and distributes state-of-the-art software and hardware used in high-speed computing, business applications and electronic gaming. With between 73% and 76% of the market, Microsoft’s Windows operating system is the best-selling laptop and desktop platform in the world.
The company has a market cap of $3.8 trillion and pays a dividend yield of 0.7%.
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7 Best Data Center Stocks, ETFs and REITs to Buy Now originally appeared on usnews.com
Update 08/29/25: This story was previously published at an earlier date and has been updated with new information.
