You can’t scroll through a financial news feed today without seeing a headline about a major market segment, be it tech or industrials, getting completely reshaped by artificial intelligence.
“A few years ago, data centers were built mainly to store files and run software,” says Tejas Dessai, director of thematic research at Global X ETFs, which manages the Data Center & Digital Infrastructure ETF (ticker: DTCR). “Today, they are being redesigned as AI factories that run advanced workloads around the clock.”
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Think of it this way: AI is the brain, and the data center is the nervous system. The explosive growth of AI has created an insatiable demand for powerful data centers.
The challenge, he says, is keeping up with this demand, especially when building new data centers is becoming more difficult “due to permitting hurdles, power delays and grid infrastructure bottlenecks.” This supply-demand imbalance is further intensified by the fact that “AI is expected to drive an explosion in data creation, so storing and processing that data will require substantial new data center capacity,” he says.
All of this leads to a key reality for investors: “The market is underappreciating the data center and digital infrastructure theme against this backdrop,” Dessai says. So, now could well be the time to capitalize on the data center and AI theme.
How to Invest in Data Centers and Hyperscalers
If you’re seeking the clearest, most direct way to invest in the AI revolution, you need to look beyond the graphics processing unit (GPU) makers and go straight to the powerhouse infrastructure that makes AI possible: data centers.
“Investors typically get exposure to AI through a handful of mega-cap technology names,” Dessai says. “But there is a lot more to the AI infrastructure story.”
Companies are increasing their data center spending so fast, it’s difficult to keep up with current estimates. In fact, consensus estimates for capital expenditures by the “Magnificent Seven” and other top hyperscalers have been revised sharply higher. Investors can now expect these tech giants to pour upward of $674 billion into AI and data center investments in fiscal 2026, according to Wall Street analysts.
Looking at the long-term horizon, the Dell’Oro Group — an independent market research firm specializing in data center infrastructure — forecasts that global data center capital expenditure will reach a staggering $1.7 trillion by 2029 in its latest estimates. That’s $500 billion higher than it projected for that timeframe in August of last year.
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, materials, utilities, energy, defense companies, real estate and, of course, the communications, information and technology sectors. Nearly the entire market is — directly or indirectly — benefiting from the ongoing data center boom.
Not just any data center stock, exchange-traded fund or real estate investment trust will do, however. Here are seven of the best data center stocks, ETFs and REITs to buy now:
*Net assets, rather than market capitalization, are listed for this fund.
**30-day SEC yield.
Equinix Inc. (EQIX)
Equinix is the largest data center REIT in the world. The company has a market cap of $106.4 billion and operates more than 280 data centers on six continents. This includes facilities and hyperscale data centers in North and South America, Europe, the Middle East, Africa and the Asia-Pacific region.
Equinix centers act as a neutral “meet-me room” where the world’s major networks, cloud providers — such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud — and enterprises physically and virtually connect. This concentration of partners creates a powerful network effect, which is difficult for competitors to replicate and drives consistent customer retention.
Digital Realty Trust Inc. (DLR)
Digital Realty is a global REIT and one of the largest dedicated providers of data center solutions. While Equinix dominates the interconnection market, DLR is a leader in offering massive, power-heavy facilities for the world’s biggest cloud providers, such as AWS, Google Cloud and Azure, to run their core infrastructure.
The company’s platform, PlatformDigital, spans more than 300 data centers globally and serves over half of Fortune 500 companies. It provides move-in-ready data center suites or build-to-suit models and the specialized power and liquid cooling solutions to support AI’s high-performance computing.
Digital Realty kicked off 2026 strong with first-quarter revenue of $1.6 billion, a 16% increase over the first quarter of 2025. It also signed the largest hyperscale lease in company history, helping to foster double-digit growth in its constant-currency core funds from operations (FFO) per share.
Nvidia Corp. (NVDA)
While not a data center operator in itself, Nvidia has become the gravitational center of the AI hardware universe. The chipmaker may be best known for its graphics processing units, or GPUs, but today its business is primarily selling the chips, network equipment and software that power AI workloads inside data centers.
At Nvidia’s March GTC conference, CEO Jensen Huang projected at least $1 trillion in revenue from 2025 through 2027, driven by what he described as “off the charts” demand for the company’s GPUs.
The company’s latest earnings back up the bull case. It reported record fourth-quarter and full-year revenue for fiscal year 2026. Data center revenue alone was $62.3 billion in the fourth quarter, an increase of 75% year over year. With the arrival of its first Vera CPUs at AI labs Anthropic, OpenAI and SpaceXAI (after the acquisition of xAI) earlier this month, chances are things are only looking up. For investors, Nvidia isn’t just riding the AI wave; it’s shaping the shoreline.
Applied Digital Corp. (APLD)
Applied Digital is a bit more of a speculative data center stock, but it does provide a direct way to play the AI infrastructure buildout. The company develops large-scale data centers for AI and high-performance computing.
Its biggest selling point is customer validation: In April, Applied Digital announced it entered into a 15-year lease worth about $7.5 billion with a U.S.-based hyperscaler. The lease brought Applied Digital’s total contracted lease revenue to more than $23 billion — over half of which is backed by investment-grade customers.
If you want a high-growth data center pick beyond the major REITs, Applied Digital offers exposure to one of AI’s core bottlenecks: capacity.
[READ: 5 Best AI Memory Stocks to Buy for 2026]
Vertiv Holdings Co. (VRT)
Vertiv doesn’t own data centers itself, but it does help data centers keep running. The company provides critical digital infrastructure, including power and cooling solutions, used by data centers, communications networks and other facilities. In Vertiv’s words, it “powers and cools” data, which is one way to conceptualize the investment case for the stock.
Naturally, demand for this service has increased with growing AI workloads. The company saw a 30% increase in net sales in first quarter 2026 compared to the same quarter last year, largely thanks to strong data center demand in the Americas. Adjusted diluted EPS also rose 83%, and the company increased its full-year guidance on the heels of such a strong start to the year.
For investors, VRT is a picks-and-shovels play on AI data centers. It may be less glamorous than semiconductor chips, but it’s essential to make those chips usable at scale.
Eaton Corp. PLC (ETN)
Eaton is another play on the same theme as Vertiv. It makes electrical equipment and power management systems that support data centers in the rising electricity demand of AI workloads. The company says it’s “helping define what it means to be AI-ready, helping the data center industry design and deploy infrastructure that can handle extreme power density, dynamic AI workloads and grid interaction.”
This makes it another picks-and-shovels approach to AI infrastructure. Demand for its services is on the rise with record sales of $7.5 billion in the first quarter of 2026, up 17% compared to Q1 2025, and a year-over-year backlog growth of 48% in its electrical sector. The company also closed $11 billion of strategic acquisitions in the quarter. Management expects organic growth of 9% to 11% for the full year with earnings per share between $10.88 and $11.33.
iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT)
Each of the previously mentioned stocks are strong contenders to benefit from future data center demand, but there is no guarantee that all of them will thrive. If you want data center exposure without committing to a single stock, a fund like IDGT could be just the ticket.
The ETF targets U.S.-listed companies involved in the storage, processing, transmission or access of digital data. In plain English, that means exposure to data centers, telecom towers and communication infrastructure — the physical backbone behind digitization and AI. That mix makes IDGT broader than a pure data center REIT fund. It can hold companies tied to real estate, communications equipment and other infrastructure that helps move and process data.
So the upside to an ETF is diversification and not needing to read company annual reports yourself. The downside is expenses. IDGT doesn’t necessarily carry a hefty fee, but you do pay 0.39% per year, or about $3.90 each year for every $1,000 you invest. Often, this is well worth the benefits, but it is something to keep in mind.
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7 Best Data Center Stocks, ETFs and REITs to Buy originally appeared on usnews.com
null 05/28/26: This story was published at an earlier date and has been updated with new information.
