When most investors think of AI stocks, companies like Nvidia (NVDA +2.59%), Microsoft (MSFT 0.60%), and other notable tech heavyweights typically come to mind. And there is a good reason why -- these are incredible businesses and there's a lot to like from a long-term investment perspective.
On the other hand, the "headline" AI stocks are richly valued, and some of the behind-the-scenes players in the industry could be more compelling investment opportunities right now.
When you see headlines like Nvidia expecting $1 trillion in AI chip sales by 2027, or Amazon (AMZN +2.02%) spending $200 billion this year on capital expenditures, think about where those Nvidia chips are going to live. Or what the hundreds of billions of dollars in AI infrastructure spending are going toward.
Think of data centers as the physical homes of AI systems. All of the physical infrastructure that makes AI technology possible has to live somewhere, and it needs to be in an environment with adequate and reliable power, sufficient cooling, and equipment in a secure location. And three data center stocks in particular could be worth a closer look right now.
Image source: Getty Images.
Three data center players to consider
No discussion of data center operators would be complete without discussing Equinix (EQIX 0.10%), which has the largest data center portfolio in the world. It operates more than 260 data centers in 36 countries, and houses more than 500,000 interconnections. Equinix data centers are often considered the gold standard in the industry.
The only other pure-play data center real estate investment trust (REIT) is Digital Realty Trust (DLR +0.38%). More than half of the Fortune 500 are Digital Realty customers. Digital Realty and Equinix are similar in size, but the main difference is that Equinix focuses on retail colocation and interconnections, while Digital Realty is a wholesaler for large-scale deployments. In fact, Equinix is one of Digital Realty's largest tenants, leasing space and subleasing it to customers.
Last but certainly not least, Prologis (PLD 0.61%) isn't a pure-play data center REIT. It is the world's largest owner of logistics space, with 1.3 billion square feet. But over the past couple of years, Prologis has been quietly pivoting its focus to data centers, and it has some key advantages. It has a massive amount of land around the world, much of which is in desirable locations for data centers, and its scale and financial strength gives it lower borrowing costs than either of the pure plays.
Strong results, and the price is right
When Equinix reported its 2025 results in February, the stock soared about 10% in response to record annualized gross bookings in the fourth quarter, tremendous momentum with AI-related customers, and guidance calling for double-digit revenue growth in 2026.
Digital Realty Trust was a similar story, with core FFO up 10% year-over-year in 2025 and an all-time high backlog heading into 2026. Prologis reported its best-ever quarter for lease signings, and its core industrial real estate business is starting to show signs of an inflection point after several years of grappling with oversupply as pandemic-driven e-commerce demand faded.
All three look attractive right now. Equinix trades for about 24 times FFO (funds from operations -- the real estate equivalent of "earnings") and has a 2% dividend yield. Digital Realty trades for a similar FFO multiple and has a higher 2.8% yield, and management has increased the dividend every year since going public in 2004. And Prologis trades at about 21 times expected 2026 FFO, with a 3.2% dividend yield and significant embedded rent growth to unlock in its industrial portfolio.
With hundreds of billions of dollars in data center investment set to occur in 2026, and even more expected in 2027 and beyond, one of these data center stocks could be a great way to get exposure to the AI trade at a great entry point.
