Companies need to invest a staggering amount of capital to build the specialized data centers capable of supporting AI processing loads. According to an estimate from McKinsey, capital spending on AI data centers alone will reach $5.2 trillion by 2030. Additionally, companies will need to invest another $1.5 billion in traditional data centers to support non-AI workloads.
Several companies are racing to build the data centers of the future. Brookfield Corporation (BN +2.31%) and Equinix (EQIX +0.25%) are emerging as early leaders in the AI data center infrastructure boom. That makes them compelling stocks to buy now to capitalize on this megatrend.
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Leveraging its strengths to be an AI infrastructure leader
Brookfield Corporation might seem like an odd choice for an AI data center stock. However, the global alternative investment firm believes AI infrastructure is a once-in-a-generation investment opportunity for the company and its clients. Brookfield plans to invest a massive amount of capital in the coming years to build AI factories (specialized AI data centers) and other critical infrastructure that supports AI, including semiconductor manufacturing capacity and power and transmission infrastructure to energize data centers.
The investment firm plans to invest capital from its balance sheet into funds managed by its affiliate, Brookfield Asset Management (BAM +0.58%), to build AI factories and related infrastructure. The leading global alternative asset manager recently launched its inaugural Brookfield AI Infrastructure Fund. This fund expects to deploy up to $100 billion into AI infrastructure. It has already secured the opportunity to invest up to $5 billion in deploying advanced fuel cell power solutions in data centers and AI factories. Additionally, Brookfield is launching a new cloud services provider (Radiant) to build AI factories.
NYSE: BN
Key Data Points
Brookfield Corporation also owns interests in several operating companies, including Brookfield Infrastructure. That entity invests in infrastructure assets, including data centers. Brookfield Infrastructure sees the potential to deploy about $500 million in capital each year into building AI data centers in conjunction with its parent. Brookfield Corporation also owns an interest in Brookfield Renewable, a renewable power company that is becoming a key energy supplier to data center operators. The global investment firm's extensive exposure to the entire AI infrastructure trend could make it a big winner in the AI era.
Building out more data centers
Equinix is one of the largest data center REITs. The company operates 273 data centers across 77 global markets. It also controls a vast land position with access to power, allowing it to expand its footprint.
NASDAQ: EQIX
Key Data Points
The REIT currently has 58 major projects underway worldwide, including 12 xScale projects (large-scale data centers). The company is building its xScale data centers through joint ventures, which provide it with additional capital to fund the expansion of these facilities. For example, it formed a joint venture with Singapore's sovereign wealth fund and the Canada Pension Plan to build $15 billion of xScale data centers in the U.S. These larger-scale data centers will play an important role in supporting AI workloads. For example, one of the company's customers recently launched a high-performance supercomputer in one of its AI-ready data centers to use AI to advance innovation and scientific discovery in the healthcare industry.
Equinix is on track to double its data center capacity by 2029. Meanwhile, it has the expertise, financial flexibility, and relationships to continue capitalizing on the growing demand for data center capacity in the future. This growth puts the REIT in a strong position to generate robust total returns for its investors in the coming years.
Leaders in building AI data centers
Brookfield Corporation and Equinix are investing heavily to build out AI data centers. That puts them in a strong position to capitalize on the growing demand for these crucial facilities in supporting the adoption of AI. Their robust growth potential makes them great AI data center stocks to buy right now.
