10 Best Data Center Stocks to Watch in 2025

The data center market is experiencing explosive growth, driven by rising demand for cloud computing, the analytics of large data sets, and artificial intelligence (AI). In this guide, we’re looking at 10 data center stocks that stand to benefit from this trend.

Global demand for data center capacity could more than triple over the next five years, according to a report by consultancy firm McKinsey. That also means that data center electricity demand could double by 2030, according to data from the Electric Power Research Institute. The need for more data centers provides an opportunity for investors to get in on a growth trend.

Traditionally, data center stocks were synonymous with data center real estate investment trusts (REITs) and chip-makers that make the chips used in data centers. There are two other key ways to play the growth of data centers: investing in companies involved in building data centers and in utility companies that will provide sustainable energy to fuel the data centers. Keep reading for our selection of the best data center stocks to invest in:

10 of the top data-center related stocks right now

These 10 stocks on our list are worth looking at because of their strong growth potential, revenue growth and profitability. Some of them are data center REITs while others indirectly benefit from the growth of data centers. Here’s a little more detail on our top stocks:

1. Nvidia: The chipmaker’s surge isn’t likely to be over just yet

Just a few months ago, Nvidia was the largest company in the world based on market cap, but so far this year, its shares have fallen more than 25%. That has a lot to do with concerns that the AI trend may be a bubble, but the chipmaker’s earnings don’t show that.

On top of that, the company continues to innovate. Its latest graphics processing units should help deliver increased market share. The company is replacing its Hopper architecture that has powered much of the AI computing models with a Blackwell design that is four times faster.

It’s true that Nvidia’s earnings have slowed, but at the pace the company has been improving, that’s to be expected. Still, its fourth-quarter numbers were dazzling. It reported quarterly revenue of $39.3 billion, up 12% from the prior quarter, and rising 78% year over year. Full-year revenue for fiscal 2025 rose by 114% to $130.5 billion. Quarterly EPS was $0.89, up 14% sequentially, and 82% year on year. Full-year EPS rose 147% to $2.94.

The company operates in four segments: data centers, automotive and robotics, professional visualization, and gaming and AI PC. Data centers revenue jumped 16% in the fourth quarter year over year, while in the automotive and robotics segment it climbed 27% from the same year-earlier quarter.

The company’s guidance points to continued growth, with revenue of $43 billion (give or take 2%) expected in the first quarter of 2026, a jump of 9%, year over year at the midpoint, However, it did point to lower margins. In the fourth quarter, it had a GAAP gross margin of 73%, and it is expecting a gross margin of 70.6% in the first quarter of 2026.

---

2. Duke Energy: Dominant power player poised for growth in demand from data center operators

Duke Energy’s electric utilities serve 8.4 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and its natural gas utilities serve 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.

Duke’s shares are up more than 9% this year and the company expects that economic development from data centers and advanced manufacturing will drive long-term growth.

There’s been a push to build more data centers in the Carolinas with Virginia becoming saturated with data centers and their utility needs. In November, Duke said that it had signed agreements to connect 2 gigawatts of new data center capacity across its service area, with load growth expected to grow further in 2027.

It’s a delicate balance, though, as Duke has to upgrade its facilities enough to meet future needs, but pinning down that number is difficult, and the building of new power plants and transmission lines takes years. A white paper by the Electric Power Research Institute says that, by the end of the decade, North Carolina’s data centers could increase by 77% to 370%. 

In fiscal 2024, Duke posted EPS of $5.71, up 61.3%. In the fourth quarter, EPS was $1.54, up 21.2% from a year earlier. Looking forward, Duke points to 2025 adjusted EPS of between $6.17 to $6.42. It sees a long-term adjusted EPS growth rate of 5% to 7% through 2029, compared to the 2025 midpoint of $6.30.

Duke has an excellent dividend that yields 3.55%. It raised its quarterly dividend by 1.9% last year to $1.045, the 13th consecutive year it has increased its dividend.

---

3. American Tower: Using cell towers to its advantage

American Tower is primarily known for owning and operating cell towers, but it’s increasingly involved in the data center business and is focusing on what it calls “edge data centers” located near its cell tower sites. That allows them to provide comprehensive communications infrastructure solutions for companies that need data center space. It currently operates 29 data centers in the US.

Thanks to its ownership of nearly 149,000 cell towers, it has plenty of land surrounding those towers that can be used for future data center development. For fiscal year 2024, it reported property revenue of $9.93 billion, up 0.7%, and FFO of $5.23 billion, up 13.5%. Adjusted FFO rose 7% to $4.93 billion.

The company’s shares are up nearly 15% this year despite conservative guidance. For fiscal 2025, it’s predicting property revenue of between $9.9 billion and $10 billion, up 0.6% at the midpoint over 2024, and AFFO of between $4.83 billion and $4.92 billion, down 1.2% at the midpoint over 2024.

The company raised its quarterly dividend by 4.9% this year to $1.70 per share, which equals a yield of around 3.13%. The AFFO payout ratio for the dividend is 73.3%, within the safety guideline for a REIT, which is expected to pay out 90% of its taxable income in dividends.

---

4. Iron Mountain: Moving into a more profitable area

Iron Mountain is known for its records protection, but it’s increasingly becoming a data center stock as it is providing digital storage for its more than 200,000 customers. The transition from physical to digital storage has forced the company to spend more in recent years, but the investment appears to be paying off. The stock is down more than 18% so far this year.

In the fourth quarter, Iron Mountain said it had record revenue of $1.58 billion, an 11.3% increase from the previous year. Full-year revenue was $6.1 billion, up 12.2%, and also a record. The increased revenue was attributed to global RIM, data center and asset lifecycle management businesses. Profit rose as well with adjusted funds from operations (AFFO) of $1.24 in the quarter, up 12% year on year, with full-year AFFO of $4.54, up 10% over 2023.

Yearly guidance shows the company expects just slightly slower improvement in 2025. It said it expected full-year revenue of between $6.65 billion and $6.8 billion, up 10% at the midpoint. It also sees full-year AFFO per share of between $4.84 and $4.95, up 8% at the midpoint.

Iron Mountain also has one of the best dividends of data center REITs. Thanks to improved AFFO, it raised its quarterly dividend by 10% to $0.785 per share, meaning a yield of around 3.69%. 

---

5. Constellation Energy: The star of clean energy for data centers

The rising demand for energy due to increased data centers brings Constellation into greater focus as the company is the largest producer of clean, emissions-free energy in the US. Its nearly 90% carbon-free plants, including hydro, wind, solar and nuclear, have the ability to provide 10% of the clear energy in the US. Constellation has said it wants to be completely carbon-free by 2040.

The company saw its profits climb in 2024. It reported full year EPS of $11.89, up 371% from a year earlier. Fourth-quarter EPS was $2.71, compared to a loss of $0.11 in EPS in the same period a year ago. The company affirmed its 2025 forecasts for adjusted operating EPS of $8.90 to $9.60 a share.

Constellation’s emphasis on nuclear energy is particularly attractive to hyperscalers who are driving increased data center use. Meta, Google, Amazon and others, on March 12, signed a pledge supporting the goal of tripling global nuclear energy capacity by 2050.

It increased its quarterly dividend by 25% in 2024, delivering a yield of around 0.76%. It said it expects a 10% dividend bump this year. Its shares are down more than 7% so far this year, making for a more attractive entry point.

---

6. Alibaba: Plenty of reasons for long-term optimism

Tariff concerns are hitting some Chinese stocks, but Alibaba isn’t one of them. The technology company, which has tentacles in e-commerce, retail, Internet, and technology, has seen its shares climb more than 58% so far this year.

Still, it may be an underpriced gem as it trades at less than 20 times earnings. China has pledged to spend additional money on stimulus and that should help Alibaba sales.

The company has recently released a new AI reasoning model that it says rivals that of ChatGPT and Chinese start-up DeepSeek. Alibaba said QwQ-32B is more efficient than other models, meaning it is easier to train. 

In the fourth quarter, the company reported revenue of $38.4 billion, up 8% year over year, and EPS of $0.35, up 259% over the same year-earlier quarter. The earnings jump was led by a 32% increase in Alibaba International Digital Commerce Group sales and by a 17% revenue rise in its Cloud Intelligence Group. 

Two other reasons to consider Alibaba is it has a dividend that yields around 1.5%, and over the past two years, it has averaged $3.2 billion in annual stock buybacks.

---

7. Equinix: Consistent growth, consistent dividend

Equinix’s shares are down more than 8% this year. The company concerned investors when it posted lower-than-expected revenue for 2024. However, it’s worth noting that the data center REIT has had increased revenue every quarter for the last 22 years. The company serves 73 markets across 34 countries.

In fiscal 2024, Equinix had revenue of $8.75 billion, rising 7% from the previous year. AFFO was $3.36 billion, up 11%, and AFFO per share was $35.02, up 9% from 2023. The company’s net income fell 8%, though, to $1.32 billion, due to $314 million of non-recurring charges due to asset impairments, restructuring and transaction costs.

The company predicts continued growth based on its guidance for 2025. It foresees revenue of between $9.03 billion and $9.13 billion, up 3% to 4%, and yearly AFFO of between $3.606 billion and $3.686 billion, which would be an increase of between 7% and 10% over 2024.

The company’s consistency extends to its quarterly dividend, which it recently raised by 10% to $4.69, the 10th consecutive year it has increased its dividend. It currently delivers a yield of 2.17%.

---

8. Vertiv: Slowdown in orders is likely to be a short-term blip

The company is a supplier to data centers, sort of a pick-and-shovel AI data center stock. It makes hardware, software, analytics and ongoing services used by data centers in more than 130 countries. The stock is down more than 32% this year, due in part to concerns that DeepSeek will dent data center growth. That is probably incorrect, though, as the prospects of cheaper AI chips will only lead to more data center use. The other reason the stock fell, though, is more problematic, as the company saw income decline in the quarter and lower orders in Europe.

The likely culprit for lower European orders is new energy efficiency rules in connection with data centers in Europe. However, in the long run, there doesn’t seem to be much that will slow overall AI use and the company released strong 2025 guidance.

In the fourth quarter, revenue climbed 25.7% year over year to $2.35 billion, and net income totaled $147 million, compared to $232.6 million in the same period a year earlier. Full-year revenue rose 16.7% to $8 billion, and net income increased 7.7% to $495.8 million. In fiscal 2025, Vertiv said it expects full-year revenue of between $9.125 billion and $9.275 billion, growth of between 15% and 17%. It also said it expects 2025 full-year EPS of between $2.93 to $3.03. That compares with $1.28 in 2024.

---

9. Schneider Electric: Plugged in to expansion of the data center market

Schneider Electric makes hardware and software for everything electrical used by data centers, such as breakers and outlets, and sophisticated cooling systems. Like Vertiv, it’s a great pick-and-shovel AI data center play because it makes so many products used by data centers. It also continues to grow through acquisitions. Its $850 million purchase of Motivair last year should give it even more data center growth as Motivar specializes in liquid cooling and advanced thermal management products and services for high-performance computing systems. 

Schneider’s shares are down roughly 5% so far this year, but its fundamentals appear solid. Its full-year revenue was a company-record €38 billion, up 6.3%. Net income for the year was €4.3 billion, up 7%. The improvement was attributed mainly to a 12% rise in revenue for its Energy Management segment.

Fourth-quarter revenue of €10.6 billion represents a 12% year-over-year increase. It also raised its annual dividend by 11% to €3.90 per share, delivering a yield of around 1.74%. It’s the 15th consecutive year it has increased its dividend.

Schneider also said in 2025 it expects adjusted EBITA organic growth of between 10% and 15%, and revenue growth of between 7% and 10%. 

---

10. Digital Realty: Data center stocks with strong balance sheet, above-average dividend

Digital Realty is the largest global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions and the sixth-largest REIT in the US by market cap. It owns more than 300 facilities in 50 metro areas in 25 countries, including every continent except Antarctica.

The company is expanding, making land purchases in Madrid, Richardson, Texas, and Charlotte, North Carolina, to help it keep up with the pace of data center needs.

It’s developing hyperscale and smaller colocation spaces, and, crucially, it hasn’t seen any contract cancellations, even after AI stocks took a blow earlier this year.

In the fourth quarter, Digital Realty’s funds from operations (FFO) rose 5.2% from a year earlier to $1.61 per share, growing 3.8% from the third quarter. Revenue was $1.4 billion for the quarter, up 5% from the same period a year earlier, and just slightly higher than in the previous quarter.

The company’s stock is down more than 11% this year, after its guidance for 2025 was seen as conservative. The company said it expected yearly revenue to be between $5.8 billion and $5.9 billion, compared with $5.5 billion in 2024. It also said it expected FFO per share of between $6.60 and $6.70, after 2024 FFO per share of $6.14.

Despite its stock downturn, Digital Realty remains a solid investment. It has delivered consistent revenue growth and reduced its debt load. In addition, as the competition for data center space is expected to grow, the company is in a strong position to negotiate lease pricing.

It also has an above-average dividend that yields 3.11%, and has an adjusted FFO payout ratio of 89.5%, plenty safe for a REIT. The company has increased its dividend by 56.4% since it instituted one in 2013, and has never cut its dividend.

---

Year-to-date performance of the data center stocks in 2025

The growth drivers of data center stocks

Cloud service providers (CSPs), including Amazon Web Services, Google Cloud, Microsoft Azure, and Baidu are fueling most of the demand for AI-ready data centers. The next trend, however, is individual companies will want more of their own AI storage capacity on private servers.

The different ways of investing in data centers

Co-location companies, such as Digital Realty and other data center REITs, have a strong position in the market. Hyperscalers need them to meet fast-growing demand, and smaller enterprises depend on their specialist services. However, there are other, less-obvious ways to invest in data center growth.

Suppliers of renewable energy, including utility companies such as Constellation or Duke Power, stand to benefit because hyperscalers such as Google and Amazon have pledged to use carbon-free energy. Makers of GPUs that are used in data centers, such as Nvidia, are seeing very strong demand for their products and companies that keep data centers running, such as Vertiv or Schneider Electric, benefit as well from data center growth.

What’s driving the growth of data centers?

It’s not just AI. There are several factors that are driving the need for more data centers and other companies that help support them:

Cloud Computing: The shift towards cloud-based services is a major driver of data center demand.

Artificial Intelligence (AI): AI applications require massive amounts of data and processing power, which data centers provide.  

Internet of Things (IoT): The growing number of connected devices generates vast amounts of data that need to be stored and processed.  

Digital Transformation: Businesses across all industries are increasingly relying on digital technologies, which require robust data center infrastructure.

---

Pros and cons of data center stocks

Investing in data centers offers a chance for investors to diversify their portfolios with a fast-growing sector that offers the potential for significant returns. However, data center stocks have their own set of challenges. The enthusiasm for AI and what its growing need means for data centers has lifted the valuations of many data center stocks, including those of chipmakers, electrical companies and utility companies that provide the energy for data centers.

Data centers require a high level of investment and face the concerns of technological obsolescence, as well as regulatory and environmental risks. Investors should carefully examine the pros and cons to decide whether investing in data centers and stocks related to data centers is the right choice for them.

Some of the benefits of investing in data center stocks

Surging demand: The digital revolution fuels explosive growth in data storage and processing, driving a robust market projected to reach substantial value. This growth, propelled by cloud computing, big data, and IoT, creates significant investment potential for stocks related to data centers, including those that supply data centers.

Consistent income: Long-term leases with creditworthy tenants provide stable, predictable cash flow, minimizing risk and offering reliable returns for data centers.

Portfolio diversification: Data centers and data center-related companies offer a unique asset class, distinct from traditional real estate, reducing overall portfolio risk and enhancing potential returns, especially during economic fluctuations.

Tax incentives: Depreciation deductions and potential credits for energy efficiency and renewable energy can significantly improve investment profitability.

Some of the drawbacks of purchasing data center stocks

Overvaluation: The enthusiasm regarding what the AI boom means for data center-related stocks has driven up the prices of many stocks.

Significant capital outlay: High initial and ongoing operational costs, including advanced infrastructure, energy consumption, and security, can create barriers to entry and impact profitability.

Rapid technological change: The need for constant upgrades to keep pace with evolving technology necessitates continuous investment and can pose a risk of obsolescence.

Environmental and regulatory concerns: High energy consumption raises environmental concerns and regulatory scrutiny, requiring strict compliance and potentially impacting operational costs.

Increasing competition: Market saturation and growing competition among investors and operators can make it challenging to secure profitable opportunities. This is true for data center REITs as well as with chipmakers and other data center suppliers.

---

---

FAQs