AI related spending is now big enough to move U.S. GDP and jobs data, yet talk of possible data center restrictions has knocked confidence and created pockets of mispricing. That mix of strong economic numbers and headline risk is where opportunity often hides. This article walks through three U.S. data center and colocation REIT stocks that look especially exposed to the latest news shock, and explains why their stories matter for your portfolio.
The three REITs highlighted below are only a starting sample from this corner of the market. A broader screen surfaced 3 more U.S. data center and colocation companies with equally compelling narratives that are not covered here. To identify those additional candidates and analyze all six side by side for your own highest conviction ideas, head straight to the U.S. Data Center Real Estate and Colocation REITs screener .
Equinix (EQIX)
Overview:Equinix runs a global network of data centers that rent secure, power dense space and connection services to cloud and AI customers.
Operations:Equinix generates about US$10.1b from designing, building and operating IBX data centers, with roughly US$4b from the U.S. and US$6.1b internationally.
Market Cap:US$98.7b
Equinix matters in this screener because it is where a significant slice of AI driven compute physically lives. Management is leaning into that with a sizeable build program.
"Equinix plans to invest US$5b to US$7b per year in development from 2027 to 2029, targeting low to mid 20% cash on cash returns with 2 to 3 year stabilizations, which, if achieved, could support higher revenue and AFFO growth than currently reflected in the stock."
What ultimately happens to investor returns hinges on how one pressure point affects both pricing power and the economics of all that new capacity.
That pressure point is exactly what the full narrative for Equinix unpacks, including how Equinix could see returns reshape if AI demand and policy risk continue to move in different directions.
Digital Realty Trust (DLR)
Overview:Digital Realty Trust owns and operates large scale data centers and colocation sites where enterprises and cloud platforms run and connect AI ready infrastructure.
Operations:Digital Realty generates about US$7.1b from commercial REIT activities, with roughly US$3.8b from the United States and US$3.3b from other regions.
Market Cap:US$67.2b
Digital Realty Trust is a pure play way to follow the AI and cloud infrastructure build out, since its business model is built around renting the power hungry, network rich halls that underpin many of those workloads.
"Digital Realty's record signed but not yet commenced lease backlog of about US$1.9b, plus a further US$410m of hyperscale leases signed in July, points to a large pipeline of contracted revenue that has not yet flowed through earnings and could support future core FFO per share."
What could matter most for Digital Realty investors now is how one funding and execution pressure shapes the eventual return on that pipeline.
That execution risk is exactly what the full narrative for Digital Realty Trust tackles, showing how funding choices, AI demand and policy headlines could be decoupling from where Digital Realty Trust is actually priced.
Fermi (FRMI)
Overview:Fermi builds large private electric grids that supply gigawatt scale, highly redundant power tailored for hyperscale AI and data center campuses.
Market Cap:US$981.1 million
Fermi matters in this screener because it aims to solve the power bottleneck that limits how fast AI data center projects can actually be built and switched on.
"Rising power needs from artificial intelligence workloads are pushing large tenants to seek long duration, dedicated power solutions. This aligns with Fermi's multi gigawatt gas generation build and can support future revenue visibility once leases are executed."
What could prove most important for Fermi investors is how one unresolved funding and execution pressure ultimately shapes pricing power and returns.
That unresolved pressure is exactly what the full narrative for Fermi breaks down, revealing how Fermi's power build, contract structure and capital choices could turn today's constraint into long term opportunity.
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This article is general in nature and was produced with the assistance of AI automation, based on data and analysis from Simply Wall St. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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