REITs that own data centers — the warehouse-sized buildings full of servers that power websites, streaming and cloud and AI computing.
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Equinix Partners With Nvidia on AI Inference Exchange as Market Cap Hits $100 Billion
Equinix has expanded its partnership with Nvidia and launched the Equinix Inference Exchange, giving enterprise customers a flexible way to run AI models using Nvidia's Enterprise Reference Architectures and Together AI's open-source inference platform through Equinix's global data centers and connectivity. The colocation data center company, which dates back to the 1998 dot-com era, operates more than 280 data centers across 77 metros with over 10,500 interconnected customers, and its facilities are optimized for Nvidia's B300 Blackwell Ultra GPUs, with some liquid-cooled sites supporting newer Vera Rubin chips. Equinix shares are up over 33% this year, lifting its market capitalization to $100 billion as the most valuable data center REIT, ahead of Digital Realty's $68 billion. In the second quarter, revenue grew 16% to $2.625 billion, AFFO per share rose 19% to $11.78, adjusted EBITDA margin reached a record 53%, and management delivered its largest guidance increase in company history. The company nearly doubled its capital expenditure guidance to $5 billion to $7 billion annually from $3 billion to $4 billion, and it expects the new Nvidia and Together AI offering to launch commercially in the first quarter of 2027.
Comcast Business Opens Last-Mile Network to Equinix Fabric via APIs
Comcast Business announced a collaboration with Equinix that will let enterprises order Comcast Business last-mile connectivity through standards-based APIs directly within Equinix Fabric, Equinix's software-defined interconnection service. The program, run through the Comcast Business Innovation Lab launched in April 2026, builds on the Lab's earlier work with Colt Technology Services this quarter to advance cross-carrier API interoperability. In the initial phase, Equinix Fabric customers will be able to digitally order Comcast Business last-mile Ethernet connectivity to eligible locations, with Comcast Business provisioning the connection and the goal of cutting delivery time from weeks to days; the companies will validate the approach with enterprise customers in live environments during this phase. Comcast Business delivers the integration through its digital orchestration platform using industry-standard APIs aligned with the Mplify, formerly MEF, Lifecycle Service Orchestration framework, so partners integrate once rather than against a proprietary specification. Over time, the program is designed to extend to optical wavelengths, cloud connectivity, and cybersecurity. Comcast Business already connects customers to more than 700 data centers nationwide, while Equinix Fabric is available in more than 240 data centers across 66 markets.
Equinix and CPP Investments Complete $4 Billion atNorth Acquisition
Equinix and Canada Pension Plan Investment Board have completed their $4 billion acquisition of Nordic data center operator atNorth, with CPP Investments becoming the controlling shareholder. The deal gives Equinix a meaningful stake in the high-density data center platform, which operates eight data centers across all five Nordic countries and has projects under development in Sweden, Finland, Norway, and Denmark. CPP Investments now owns approximately 51% of atNorth after committing $1.3 billion, while Equinix holds about 34% following an $895 million commitment. Partners Group, atNorth's previous owner, reinvested $260 million for an approximately 10% stake, with the remainder held by internal stakeholders. The transaction is immediately accretive to Equinix's adjusted funds from operations per share and is supported by a $4.1 billion financing package from European and Canadian lenders.
AI Data Center Landlords Drive DTCR ETF Up 38% This Year
The Global X Data Center & Digital Infrastructure ETF has climbed 38% year to date, powered by Equinix and Digital Realty, which together account for roughly 40% of the $2.14 billion fund. Equinix is up 42% and Digital Realty is up 29% this year, while the fund's top four holdings also include American Tower and Crown Castle. In Q2 2026, Equinix reported $424 million in annualized gross bookings, its second-highest quarter on record, and CEO Adaire Fox-Martin called the guidance raise the largest in company history, with adjusted EBITDA margin at 53%. The fund's REIT-heavy tilt makes it sensitive to the 10-year Treasury yield, and a break above 5% could compress multiples even if AI leasing stays strong, as happened in 2022 when both REITs lost roughly a third of their value. Investors should watch Equinix's next bookings report in late October for confirmation that pricing power is still compounding.
Equinix Q2 AFFO Beats Estimates on Strong Demand and xScale Fees
Equinix reported second-quarter 2026 adjusted funds from operations per share of $11.78, beating the Zacks Consensus Estimate of $11.25 by 4.71% and rising 18.9% year over year. Revenues grew 16.4% to $2.63 billion, surpassing the consensus of $2.59 billion, driven by strong underlying demand and one-time xScale leasing fees. Adjusted EBITDA climbed 23.6% to $1.40 billion, with the margin expanding to a record 53% from 50% a year earlier. The company raised its full-year 2026 revenue guidance to a range of $10.205 billion to $10.285 billion and now expects AFFO per share between $42.69 and $43.29. Equinix also lifted its 2027-2029 outlook, projecting annual revenue growth of 10% to 13% and an adjusted EBITDA margin exceeding 53% by 2029.
Equinix shares fall on soft third-quarter forecast
Equinix shares fell 3% on Wednesday after a soft third-quarter forecast overshadowed raised full-year and long-term outlooks. The company expects third-quarter revenue between $2.53 billion and $2.58 billion, with the midpoint below analysts' estimate of $2.58 billion. Equinix raised its 2026 revenue forecast to a range of $10.21 billion to $10.29 billion, up from $10.14 billion to $10.24 billion, and lifted its full-year adjusted funds from operations per share forecast to $42.69 to $43.29 from $42.31 to $43.11. The data center operator now projects annual revenue growth of 10% to 13% through 2029, up from a prior range of 7% to 10%, and AFFO per share growth of 9% to 12% annually versus 5% to 9% earlier. Second-quarter revenue came in at $2.63 billion, above the $2.58 billion estimate.
Equinix reported second-quarter funds from operations of $11.78 per share, beating the Zacks Consensus Estimate of $11.25 per share and up from $9.91 a year ago. Revenues reached $2.63 billion, surpassing the consensus estimate by 1.34% and comparing to $2.26 billion in the prior-year quarter. The FFO surprise was 4.71%, while the company has topped consensus FFO estimates twice over the last four quarters. Equinix shares have gained about 35.1% year-to-date, outperforming the S&P 500's 8.5% advance. The current Zacks Rank for the stock is 3, or Hold, with consensus FFO estimates of $10.72 for the coming quarter and $43.05 for the fiscal year.
Equinix reported second-quarter funds from operations of $8.61 per share, beating analyst estimates by 14 cents, while revenue rose 16.4% year over year to $2.63 billion, exceeding expectations by $50 million. The data center operator grew monthly recurring revenue 11% on both an as-reported and constant currency basis, and annualized gross bookings jumped 23% to the second-highest volume on record, contributing to a record backlog. Equinix added a record 9,700 net interconnections during the quarter. The company also raised its full-year 2026 guidance, now projecting revenue between $10.205 billion and $10.285 billion and adjusted funds from operations per share of $42.69 to $43.29, reflecting a $100 million revenue increase and a 46-cent AFFO per share boost before foreign exchange impacts.
Barclays Raises Equinix Target to $1,130 on AI Demand
Barclays raised its price target for Equinix Inc. to $1,130 from $1,109 on July 1, retaining an Equal Weight rating and implying over 13% upside. The firm cited larger growth prospects than previously projected for communications infrastructure real estate investment trusts, driven by elevated demand trends across hyperscale and enterprise AI. Equinix recently disclosed an extended collaboration with Nvidia Corp. and Cisco Systems Inc. to accelerate enterprise AI solutions, allowing clients to implement the Cisco Secure AI Factory with Nvidia across its global data center network. The company is also working with Presidio to launch a Programmable AI Technology Hub Lab for clients to verify and test AI infrastructure before enterprise-wide deployment.
BTIG initiates Digital Realty Trust and Equinix with buy ratings
BTIG initiated coverage on data center REITs Digital Realty Trust and Equinix with buy ratings, citing strong demand for AI, cloud services, and digital infrastructure. For Digital Realty Trust, analysts set a $215 price target, pointing to a $16.5 billion development pipeline, around 5 gigawatts of future capacity, and a strong presence in Tier 1 markets as drivers for rent increases, asset value growth, and steady AFFO per-share growth, forecasting 8.5% growth in 2026 and 12.2% in 2027. For Equinix, BTIG set a $1,210 price target, highlighting its global colocation platform, more than 500,000 interconnections, an $8 billion colocation development pipeline, and its xScale hyperscale project as growth catalysts, with AI inference adoption, limited supply growth, higher utilization, and pricing improvements expected to support earnings.
BTIG starts Digital Realty and Equinix at Buy, calls data center demand a multi-decade supercycle
BTIG initiated coverage of Digital Realty Trust and Equinix with Buy ratings, calling AI-driven demand a multi-decade supercycle for data centers. Analyst Thomas Catherwood set a $215 price target on Digital Realty and a $1,210 target on Equinix, citing record hyperscaler capital expenditure projected at more than $650 billion in 2026, up 72% year-on-year. Data center rents have risen 63% over the past five years, while new developments are expected to increase global supply by 86% through 2030 at an estimated total cost of $5.1 trillion. Despite the record construction pipeline, supply constraints around power availability, long lead times and high capital requirements make a typical cyclical oversupply unlikely. BTIG favors operators with proven track records, operational expertise, flexible capital structures and concentration in core markets.
Equinix Named One of the Best Data Center Stocks to Buy in July
Equinix has been identified as one of the 10 best data center stocks to buy in July. The stock closed 2.41% higher at $1,022.93 on Tuesday, with 79% of 33 analyst ratings compiled by CNN rating it a Buy and the remaining 21% a Hold. The median price target stands at $1,212.50, representing an 18.53% upside. Barclays raised its price target to $1,130 from $1,109 while maintaining an Equal Weight rating, citing higher growth expectations in the communications infrastructure REIT group driven by hyperscale demand and accelerating enterprise AI demand. Citi also increased its target to $1,260 from $1,240 with a Buy rating, noting benefits from cloud and AI workload growth.
Old-School Data Center REITs Seen as Best and Safest Technology Play
Hyperscalers are locking in 15-year leases before facilities break ground, with grid interconnection queues stretching to 2030 cementing a multi-year supply squeeze. Equinix posted a record $378 million in first-quarter bookings while Digital Realty Trust grew sales 16% year over year and carries a $1.8 billion backlog. All three data center REITs pay dividends above 1.9% and hold Buy ratings from Citigroup, Truist Financial, and JPMorgan.
Barclays raised its price target on Equinix to $1,130 from $1,109 while maintaining an Equal Weight rating, citing higher growth expectations across the communications infrastructure REIT group. The firm noted that companies are benefiting from ongoing hyperscale demand and accelerating enterprise AI demand. Separately, Citi raised its target to $1,260 from $1,240 with a Buy rating, highlighting Equinix's multi-year growth prospects from cloud and AI workloads. Equinix also announced an expanded collaboration with Cisco and Nvidia to accelerate enterprise AI, enabling customers to deploy Cisco Secure AI Factory with Nvidia across its global data center network.
Equinix Outperformed in Q1 on Record Bookings and AI Demand, Says Meridian Hedged Equity Fund
Equinix was a leading contributor to the Meridian Hedged Equity Fund in the first quarter of 2026, driven by record bookings, accelerating recurring revenue growth, and AI-related workloads approaching 60% of recent large-scale deals. The fund, managed by ArrowMark Partners, returned 0.08% net for the quarter, outperforming the S&P 500 Index which fell 4.33%. Equinix operates 280 data centers across 77 markets and maintains over 500,000 interconnections, creating a strong network effect. The fund maintained its position throughout the quarter while noting that elevated capital expenditures to meet surging demand warrant continued monitoring.
Equinix is becoming a key stop in the AI supply chain, expanding its role beyond renting space to providing secure, high-performance sites for AI workloads. The company recently partnered with Nvidia and Cisco to deploy secure AI factories across its global data center network, validating its position in AI infrastructure. Equinix reported first-quarter 2026 revenue of $2.444 billion, up 10% year-over-year, with net income of $415 million, up 21%, and raised full-year revenue guidance to between $10.144 billion and $10.244 billion. The stock has gained roughly 43.2% year-to-date to about $1,089, but trades at a premium with a price-to-earnings ratio of 71.54 times, well above the REIT sector average of 30.45 times. Analysts remain bullish with an average price target of $1,203.90, implying 9.8% upside, though caution is warranted after the strong run.
Equinix expands Cisco and NVIDIA partnerships to speed enterprise AI adoption
Equinix has expanded its partnership with Cisco and NVIDIA to accelerate enterprise AI adoption by enabling customers to deploy the Cisco Secure AI Factory with NVIDIA across its global network of high-performance data centers. The company is also teaming up with Presidio to deploy its Programmable AI Technology Hub lab, located within Equinix data centers, providing a real-world environment for testing and validating AI infrastructure before enterprise-wide rollout. The deployments are based on NVIDIA reference architectures and give customers access to the interconnection density, specialized power, and advanced cooling required for the latest AI hardware and software. The solution supports deployments spanning public cloud, neocloud, on-premises, and colocation environments.
Texas Audit and Cape Town Challenge Test Digital Realty and Equinix Data-Center Pipelines
Texas has ordered a broad audit of projects in ERCOT's 474-gigawatt interconnection queue, while campaigners are challenging a proposed 122,500-square-meter hyperscale project near Cape Town International Airport tied to Equinix, tightening the gate on data-center development in two very different markets. Digital Realty publicly committed on August 7 to Texas Governor Greg Abbott's data-center standards, a move that could make its existing powered campuses more valuable as interconnection queues slow new supply. Equinix's position in South Africa remains contested: the Financial Times reviewed a planning application identifying Equinix as developer, while Equinix said it had no active plans to develop the site, and campaigners want the approval overturned over concerns about power, water and the planning framework. Hedge fund exposure to both landlords rose in the second quarter, with 73 funds holding Digital Realty, up from 46, and 73 holding Equinix, up from 65, according to Insider Monkey's database, though those filings predate the Texas audit and Cape Town challenge. Digital Realty had 8,390,668 shares sold short on August 31, or 2.27% of float, with 3.97 days to cover. Local resistance is not automatically bearish for established operators, since limits on new supply can raise the scarcity value of existing facilities, but the calculus flips when restrictions delay the operators' own pipeline.
Equinix, NVIDIA, Together AI Launch Distributed AI Inference Program
Equinix has expanded its collaboration with NVIDIA and announced a new partnership with Together AI to deliver Equinix Inference Exchange, a distributed AI inference program for global enterprises. The offering combines NVIDIA Enterprise Reference Architectures, Together AI's inference platform, and Equinix's global infrastructure to improve deployment speed, flexibility, and cost efficiency as enterprises move AI workloads from experimentation to production. Equinix's footprint includes more than 280 data centers across 77 metros, 230 cloud on-ramps, and over 10,500 interconnected businesses, with eight of the top 10 AI model providers and nine of the top 10 AI cloud providers already deployed. The service is expected to become available in the first quarter of 2027, and Equinix has not disclosed financial targets for the offering.
Diraq to Deploy First Silicon Spin Quantum Computer in Equinix Data Center
Diraq and Equinix announced plans to deploy a Diraq quantum computer at an Equinix data center in Sydney, Australia, marking the world's first silicon spin quantum computer to operate in a shared commercial data center. The system features an eight-qubit silicon chip with self-contained cryogenic cooling and control electronics, drawing less than 20kW of power and fitting within existing data center infrastructure. Scaling to higher qubit counts requires only a chip replacement, making the system easily upgradable. The collaboration aims to test real-world performance, chart a path to commercial scale, and begin partner and customer conversations. Installation at Equinix's Sydney data center is expected to be completed in October 2026.
Equinix Urges FERC to Adopt Urgent PJM Reliability Reforms
Equinix has urged the Federal Energy Regulatory Commission to adopt urgent reliability reforms in response to resource adequacy concerns in the PJM power market, submitting detailed recommendations aimed at improving market stability and long-term energy supply reliability for large users such as data centers. The company highlighted that reliability rules in key US regions can directly affect its data center operations and the cost and availability of power for its customers. Equinix, a US-based specialized REIT that runs interconnected data centers, is pushing for a one-time backstop and more workable bilateral procurement to reduce the risk that regulatory friction or opaque cost allocation slows new data center projects. This regulatory push shows Equinix trying to shape one of the biggest practical constraints on its AI and cloud build-out: reliable and affordable power. The filing supports the catalyst that Equinix can keep scaling AI and cloud-focused capacity in large metros by working to secure dependable energy supply, while addressing execution risk around access to energy and large capex projects that analysts have flagged.
Singapore allocates 200 megawatts of power to four data centre providers
The Singapore Economic Development Board and the Infocomm Media Development Authority have announced an initial allocation of 200 megawatts of power for new data centres to four providers, to expand artificial intelligence infrastructure while managing energy use sustainably. The allocation gives Digital Realty, Equinix, Keppel Data Centres, and ST Telemedia Global Data Centres 50 megawatts each, under the second round of the data centre development call-for-application. Singapore opened applications for this scheme in December 2025 and received more than 20 proposals from local and international operators. The four providers have committed that more than 50% of the data centres' capacity will be powered by clean energy sources, and that they will use advanced energy-saving technologies including liquid cooling systems and 100% energy-efficient IT equipment, while meeting Singapore's Platinum standard for green data centres. The two agencies will review demand and open a new application round in the next 18 to 24 months.
Equinix Partners with Central Georgia Electric Membership Corporation to Protect Ratepayers
Equinix and Central Georgia Electric Membership Corporation announced a partnership for the Hampton, Georgia data center project under which Equinix will cover all grid infrastructure costs and fund new transmission and power capacity, backed by a 20-year take-or-pay contract. The agreement ensures Equinix pays 100% of CGEMC's costs for serving the contracted demand, including upfront payments for a new high-voltage substation, two new high-voltage transmission lines, and early site work, while guaranteeing ratepayers are never left to pay project-related costs. The project is expected to contribute up to $20 million annually in property tax revenue, create more than 990 local jobs, and extend Equinix's Pathways to Tech program to the region. Georgia Governor Brian Kemp and Hampton Mayor Ann Tarpley praised the investment as a responsible model that protects ratepayers while delivering economic benefits. The partnership builds on similar agreements Equinix has with PG&E in San Jose, California and ComEd in Northern Illinois.
Digital Realty Trust and Equinix lead real estate gainers as sector hits 52-week high
Digital Realty Trust and Equinix were among the top large-cap real estate gainers this week as the sector benefited from a rotation out of technology stocks and reached a new 52-week high. The Real Estate Select Sector SPDR Fund hit a 52-week high after upbeat housing data, with the S&P 500 Real Estate Index Sector rising 1.35% to 293.1 points. Digital Realty Trust surged 14.49% to $199.08 after posting stronger-than-expected second-quarter earnings and raising its full-year guidance, while Equinix advanced 6.30% to $1,084.24. Among large-cap losers, KE Holdings fell 8.68% to $15.89 and CoStar Group dropped 7.12% to $27.66. In the mid-cap segment, Opendoor Technologies was the biggest loser with a 14.78% decline to $3.84, while data center REIT Fermi led gainers with a 22.31% jump to $7.40.
Real estate stocks gain as softer inflation data sends Treasury yields lower
Real estate stocks advanced this week even as Wall Street's major averages declined amid a semiconductor sell-off and Middle East tensions. The S&P 500 Real Estate Index Sector rose 2.26% to 289.21 points, while the State Street Real Estate Select Sector SPDR ETF added 2.18% to $45.42. All real estate subsectors gained except data center REITs, which were pressured by New York becoming the first U.S. state to impose a one-year moratorium on large new data center construction and Jersey City banning data centers as the primary use of industrial property. KE Holdings led large-cap gainers with an 11.75% weekly increase to $17.40, while Digital Realty Trust and Equinix topped the losers, falling 3.62% and 2.97% respectively. Among midcaps, Rexford Industrial Realty rose 9.79% and Fermi dropped 8.19%.
Data Center REITs Surge 33% in 2026, Outpacing Broader Market
Data center real estate investment trusts have returned 33.2% year to date as of June 30, driven by extraordinary growth from AI companies and rising data usage, according to the National Association of Real Estate Investment Trusts. The broader REIT sector, as measured by the Vanguard Real Estate Fund ETF, is up more than 10% year to date, roughly matching the S&P 500's 10.5% gain. Among individual data center REITs, Equinix has risen 34% and Digital Realty Trust has gained 14% so far this year. Realty Income, traditionally a retail and industrial REIT, is entering the data center space through a $6 billion joint venture with Cloud Capital that will invest in stabilized hyperscale assets, with its first investments being three facilities in Northern Virginia's data center alley.
REITs Were the Best-Performing Asset Class in June After Years of Lagging
Real estate investment trusts, or REITs, were the best-performing asset class in June, a surprise turnaround for a sector that has struggled for years. The S&P 500 fell about 1% in June, while most other asset classes also declined, but REITs posted gains. The entire REIT sector is up about 9.5% this year, as measured by the Vanguard Real Estate Index Fund ETF, slightly outperforming the broader market. Lodging and resort REITs surged almost 43% this year and 12% in June alone, driven by a resurgence in group and corporate travel, while data center REITs climbed more than 33% on growth from artificial intelligence and rising data usage. Healthcare and self-storage REITs each rose over 20% in 2026, with only gaming and telecommunications REITs posting declines among the 14 REIT categories tracked by the National Association of Real Estate Investment Trusts.
Data Center Colocation Market to Reach USD 298.78 Billion by 2035
The global data center colocation market is projected to grow from USD 86.24 billion in 2025 to USD 298.78 billion by 2035, at a compound annual growth rate of 13.19 percent, according to a report by SNS Insider. North America held the largest share in 2025 at approximately 36 to 39 percent of global revenues, with the United States alone valued at about USD 26.69 billion and expected to reach USD 92.46 billion by 2035. The retail colocation segment dominated with roughly 70 percent market share, while wholesale colocation is the fastest-growing segment driven by AI computing's power density requirements. Tier 3 facilities led with about 58 percent share, and IT and telecom accounted for approximately 29 percent of end-use revenue. Key players include Equinix, Digital Realty, CyrusOne, Iron Mountain, and NTT Global Data Centers.
Citi Raises Data Center Forecasts, Names Top AI Stocks
Citi has raised its global data center growth forecasts, citing accelerating hyperscale investment in high-performance computing and AI workloads, and has named a list of stocks it expects to benefit across multiple sectors. The bank now projects global data center IT load will grow at a 25% compound annual rate, rising from 121 gigawatts in 2026 to 370 gigawatts in 2031, with annual absorption accelerating from 35 gigawatts in 2026 to 60 gigawatts in 2031. Citi notes that short-term supply constraints from energy availability and regulatory pauses in Texas and New York should be resolved constructively, and that pre-leasing could extend into 2028-2030. The bank recommends buying data center stocks Equinix, Digital Realty Trust, and TeraWulf, and names NextEra Energy and FirstEnergy as utility winners, AMD and Celestica in semiconductors, Amazon, Alphabet, and Meta in internet, and Microsoft, Oracle, and neocloud providers in software.
NVIDIA and Equinix Expand AI Inference Partnership
NVIDIA and Equinix have expanded their partnership to launch Equinix Inference Exchange, a distributed AI inference program for global enterprises, alongside a new collaboration with Together AI. Equinix shares rose 2% on the announcement. The platform combines NVIDIA's Enterprise Reference Architectures, Together AI's inference platform, and Equinix's global data center and networking infrastructure to help enterprises move from AI experimentation to production. NVIDIA will leverage Equinix's 280-plus data centers to push computing closer to users, but no financial terms or hardware commitments were disclosed. The partnership builds on a collaboration that has been ongoing for over a year, and the launch is expected around Q1 2027, so near-term revenue impact is limited. Equinix, which already hosts eight of the top 10 AI model providers and nine of the top 10 AI clouds, gains a new way to monetize its infrastructure without building a new network. Hedge fund interest has increased in both companies, with 285 funds holding NVIDIA and 73 holding Equinix at the end of the second quarter.
APAC Data Center Colocation Market to Reach $64.08 Billion by 2031
The Asia-Pacific data center colocation market is projected to grow from an estimated $27.19 billion in 2025 to $64.08 billion by 2031, at a compound annual growth rate of 15.3%. This growth is driven by rapid digitalization, increasing AI integration, and the adoption of liquid cooling technologies across the region. Major markets such as China, Japan, and Australia lead investments, while Southeast Asian countries like Singapore and Indonesia are seeing burgeoning developments. Prominent operators include China Telecom, Equinix, and NTT DATA, with emerging entrants expected to intensify competition.
U.S. Data Center Market to Reach $494.49 Billion by 2031
The U.S. data center market is forecast to grow from an estimated $298.97 billion in 2025 to $494.49 billion by 2031, at a compound annual growth rate of 8.7%. The expansion is driven by surging AI workloads, which are expected to triple hyperscale data center capacity over the next five to six years, prompting major investments such as Oracle's $40 billion commitment to NVIDIA chips for OpenAI's new U.S. facility. Sustainability efforts are intensifying, with operators like Equinix and CyrusOne targeting carbon neutrality by 2030 and securing renewable energy deals, including TotalEnergies' supply agreement with Google. Key infrastructure providers include Arista Networks, Cisco Systems, and NVIDIA, while contractors like Turner Construction and Rosendin Electric support facility development. The South-East U.S. remains the leading investment region, with Northern Virginia retaining its status as the global data center capital.
AI data center boom creates investment opportunities across chips, real estate, energy, and cooling
The massive buildout of AI data centers is creating distinct investment opportunities across semiconductor equipment, real estate, energy, and cooling, according to experts interviewed by Fortune. Hyperscalers are projected to spend between $750 billion and $800 billion annually, with some forecasts reaching $1 trillion, representing 2.5% to 3% of U.S. GDP. In chips, B. Riley Securities analyst Craig Ellis recommends shifting focus from giants like Nvidia to equipment suppliers such as Applied Materials, Lam Research, and Marvell Technology, citing severe undersupply that will drive multi-year capex growth. For real estate, CenterSquare’s Patrick Wilson highlights data center REITs Equinix and Digital Realty as beneficiaries of the shift from AI training to inference, which favors urban facilities with low latency. Morningstar’s Andrew Bischof points to utilities like American Electric Power, which plans $78 billion in infrastructure investment through 2030, while New Constructs’ David Trainer sees value in traditional energy stocks such as Valero and HF Sinclair. In cooling, Morningstar’s Nick Lieb favors Vertiv for its dominant position in precision cooling, though notes concentration risk, and Eaton for its diversified exposure to the electrical grid. Some analysts warn that current spending levels may be unsustainable, with hyperscalers increasingly relying on debt and equity issuance.
Real estate stocks eke out gains in June, post solid returns in four months of H1 2026
Real estate stocks closed the first half of 2026 with gains in four of the six months, eking out a positive June despite a hawkish Federal Reserve. The S&P 500 Real Estate Index Sector rose 0.23% month-over-month to 279.69 points, while the State Street Real Estate Select Sector SPDR ETF added 0.09% to $44.03. The Dow Jones REIT Indx Equity REIT Total Return Index advanced 1.48%, and the FTSE Nareit All Equity REITs index gained 0.81%. Office REITs and Health Care REITs were the biggest beneficiaries among subsectors, but losses in Specialized REITs and Industrial REITs weighed on overall returns. The benchmark 10-Year Treasury yield ended flat at 4.47%, easing fiscal concerns that had driven borrowing costs higher in May. Among large-cap stocks, data center REITs led weekly losers, with Iron Mountain down 10.61%, Digital Realty Trust off 9.95%, and Equinix falling 7.87%, reflecting public anxiety over electricity grid strains from AI data centers. American Healthcare REIT topped the gainers, up 8.09%, after Citi upgraded the stock to Buy. In midcaps, Compass rose 14.21% after management met with Oppenheimer, which maintained a Buy rating, while data center REIT Fermi fell 8.41%. Small-cap decliners were led by mortgage REITs Redwood Trust and Apollo Commercial Real Estate Finance, the latter downgraded by BTIG on expected book value erosion from asset sales. Newly appointed Fed Chair Kevin Warsh's hawkish comments fueled speculation that rate hikes could return, pressuring mortgage REITs near-term but potentially benefiting them from wider spreads over time.
iShares U.S. REIT ETF Outperforms Vanguard Global ex-U.S. Real Estate ETF on AI-Driven Data Center Exposure
The iShares Select U.S. REIT ETF has delivered a 13.50% total return over the trailing 12 months, far outpacing the 1.80% return of the Vanguard Global ex-U.S. Real Estate ETF, as the U.S. fund benefits from holdings in data center REITs tied to artificial intelligence infrastructure. The iShares fund, which carries a 0.32% expense ratio and a 2.50% dividend yield, holds a concentrated portfolio of 30 large-cap U.S. REITs, with top positions including Welltower at 8.22%, Equinix Reit at 7.83%, and Prologis Reit at 7.69%. In contrast, the Vanguard fund offers broad international diversification across 682 holdings, a lower expense ratio of 0.12%, and a higher dividend yield of 4.80%, but its focus on traditional real estate has lagged the AI-driven performance of its domestic counterpart. Over five years, a $1,000 investment in the iShares fund grew to $1,173, while the same amount in the Vanguard fund declined to $943, though both experienced similar maximum drawdowns of around 34%. The analysis suggests that while Vanguard’s lower cost and higher yield may appeal to value-oriented investors, the iShares fund’s exposure to the AI opportunity could lead to stronger long-term total returns.
U.S. Data Center Market to Reach $494.49 Billion by 2031
The U.S. data center market is forecast to grow at a compound annual growth rate of 8.75% from 2025 to 2030, reaching an estimated $494.49 billion by 2031. The market was valued at $298.97 billion in 2025. AI is expected to triple hyperscale data center capacity over the next five to six years, with projects like Lambda's AI Factory in Kansas City and Oracle's $40 billion investment in NVIDIA chips for OpenAI's new U.S. data center. Operators are increasingly investing in renewable energy, with Equinix and CyrusOne targeting carbon neutrality by 2030. Key players include CyrusOne, Digital Realty, and Equinix, while EdgeCore plans a $17 billion project in Virginia and Microsoft is expanding with $4 billion in Wisconsin.
Nasdaq, NYSE Arca and Cboe EDGX Plan 23-Hour US Equities Trading From Dec. 6
Nasdaq, NYSE Arca and Cboe EDGX plan to extend US equities trading to 23 hours a day, five days a week beginning Dec. 6, subject to final SEC approval. Seeking Alpha analysts Luca Socci and Jack Bowman weighed the pros and cons of near-continuous trading. Socci said the shift toward a 24-hour market is a matter of when, not if, arguing that more activity will be regulated and exchange structures will improve, that non-US residents will see the time-zone mismatch reduced, and that price discovery could become more continuous, narrowing gaps at the opening bell. He cautioned that longer hours do not necessarily mean more liquidity and that companies will have to figure out how to release earnings while the market is open, noting Berkshire's Saturday reporting strategy could find followers. Bowman said the main benefit for retail investors is no longer being bound to traditional market hours, but warned overnight demand is thin outside institutions and that spreading liquidity across 23 hours will fragment it further. Both flagged exchanges as beneficiaries, with Socci naming Cboe Global Markets, Nasdaq, Intercontinental Exchange, Equinix, Digital Realty Trust, Broadridge Financial Solutions and Virtu Financial, while Bowman cited Nasdaq, the NYSE, Cboe Global Markets and CME, expecting derivatives volume to rise as cross-security hedging becomes more viable.
Greg Abel May Ramp Up Buybacks, Tech Dividends, and Energy Investments at Berkshire Hathaway
New Berkshire Hathaway CEO Greg Abel is expected to deploy the company's $397 billion cash pile in three key ways. He has already overseen hundreds of millions in stock repurchases in his first quarter, with estimates of a few billion dollars in buybacks during the second quarter, signaling a greater willingness than predecessor Warren Buffett to use buybacks. Abel may also seek growth and income in technology, potentially adding AI data center REITs like Equinix or Digital Realty Trust, though he is unlikely to expand the existing Alphabet stake. Additionally, he is likely to invest in expanding Berkshire Hathaway Energy's capacity to serve the fast-growing AI data center market, a business he previously managed and where he sees demand potentially growing by 50% or more in five years.
CoreWeave Falls 6% After Bernstein Warns Slower AI Training Could Hit Data-Center Demand
CoreWeave shares fell 6% Monday after Bernstein warned in an investor note that slower artificial intelligence model training could pressure data-center demand. Analyst Maidson Rezaei said facilities in rural and Tier 3 markets could face greater pressure because many were developed around training workloads that are less sensitive to network latency. Bernstein estimates about 70% of a 488-gigawatt U.S. data-center development pipeline sits in rural or Tier 3 areas, and CoreWeave holds about 25% of its active U.S. power and roughly 74% of contracted power in Tier 3 and Tier 4 markets. The firm said CoreWeave's existing backlog is largely supported by take-or-pay agreements, which may limit near-term risk, though demand for contracted capacity not yet sold could weaken if training activity slows. Equinix, Digital Realty Trust and Csquare may be less exposed because most of their capacity is in metropolitan markets; Bernstein rates CoreWeave Underperform with a $74 target and assigns Outperform ratings to the other three.
Dell Technologies selected to build Texas A&M's IGNITE AI computing platform
Texas A&M Engineering Experiment Station has selected Dell Technologies to design and build IGNITE, a new AI and high-performance computing platform. The system will use Dell PowerRack systems with liquid-cooled PowerEdge servers and AMD Instinct MI355X GPUs, deployed at an Equinix data center in Dallas. This win reinforces Dell's role in large AI deployments across education, government, and commercial cloud, alongside its partnership with Volta Infra Holdings for an Nvidia-backed AI cloud platform. The IGNITE project highlights how Dell's servers, storage, and services are being adopted across diverse AI use cases, potentially supporting near-term AI server demand.