Top Data Center Stocks, REITs, and ETFs to Watch in 2024

Data centers are the backbone of today’s digital economy, supporting everything from cloud computing to artificial intelligence (AI) and big data. With the exponential growth in internet use, digital services, and online storage, investing in data center stocks, REITs, and ETFs has become a popular choice for those seeking exposure to this critical infrastructure. Here are some of the best data center stocks, real estate investment trusts (REITs), and ETFs for 2024, along with trends driving the demand for these assets.
1. Equinix Inc. (EQIX)
Equinix is a global leader in data center and colocation services, with over 240 data centers in more than 27 countries. Equinix’s interconnection services are its core strength, connecting data centers worldwide for clients who need quick and secure data exchange. As demand for edge computing and digital transformation accelerates, Equinix remains a top choice for investors seeking exposure to data center growth. With its focus on expansion and sustainable data center operations, EQIX is well-positioned for long-term growth. Digital Realty Trust Inc. (DLR) Digital Realty is one of the largest data center REITs, managing a diverse portfolio of data centers worldwide. Its facilities are strategically located to support hyperscale data, enterprise solutions, and interconnection services. DLR’s recent investments in green energy for data centers appeal to ESG-conscious investors, enhancing its attractiveness in the market. Its focus on acquisitions and joint ventures in high-growth markets keeps it at the forefront of the data center sector .
ite Realty Corp. (COR)**
CoreSite, now part of American Tower (AMT), operates data centers primarily across major U.S. markets. Known for its reliable, high-performance colocation services, CoreSite serves clients that need low-latency connections in metropolitan regions. The acquisition by American Tower strengthens CoreSite’s growth potential, as it now benefits from AMT’s established infrastructure and client base. Investors view CoreSite as a robust choice for steady growth due to its strong positioning in key U.S. data center markets .
4. Iro)
Originally focused on information storage, Iron Mountain has diversified into data centers, targeting clients who need secure digital data management. Iron Mountain has been expanding its data center footprint through acquisitions and partnerships. Its focus on secure storage and compliance makes IRM attractive for clients with stringent data security requirements. This diversification strategy has boosted IRM’s revenue streams, providing a stable and secure investment option .
5. *SBA Communications Cor
SBA Communications is a major player in telecommunications infrastructure, specializing in cell tower management. Although SBA primarily focuses on wireless communication, it is increasingly involved in edge data centers, which place data processing closer to end users. This shift aligns with trends in 5G and IoT, positioning SBAC to benefit from growing demand for low-latency solutions and digital infrastructure .
6. CyrusOne Inc. (CONE)
Cyrud by KKR and Global Infrastructure Partners, is known for its hyperscale data centers that serve cloud providers and enterprise clients globally. The acquisition offers CyrusOne access to expanded resources and capital, enabling it to continue expanding its presence in North America and Europe. This REIT’s focus on high-growth areas for data-intensive industries makes it an appealing choice for investors looking for exposure to hyperscale growth .
7. Vanguard Real Estate ETF (VNQ)
The Vanguard ReTF is one of the largest ETFs in real estate and offers exposure to a variety of REITs, including data center-focused options like Digital Realty and Equinix. VNQ provides a diversified investment approach for those who want exposure to data centers without concentrating solely on individual stocks. Its holdings are diversified across various REITs, providing stability and income potential for long-term investors .
Trends Driving Data Center Stock Growth
- **Cloud ComputingDemand for cloud services and AI technology drives significant data processing and storage needs, fueling the expansion of data centers .
- 5G and Edge Computing: As 5G networks expand, the demand for low-latency s closer to end users is growing. Edge computing needs will drive investments in new data center locations .
- Data Sovereignty and Compliance: With stringent regulations around data storage andy, companies increasingly seek localized data centers, creating demand for new facilities in diverse markets .
- Sustainable and Green Data Centers: Many companies prioritize sustainability, pushing data ceopt green technologies and renewable energy sources, an attractive trend for ESG investors .
Conclusion
Investing in data center stocks, REITs, and ETFs can provide exposure to a fast-growing sector phe digital economy’s relentless growth. Equinix, Digital Realty, CoreSite, and other data center-focused investments remain strong options, each offering unique advantages. For those seeking a diversified approach, ETFs like Vanguard Real Estate ETF offer broad exposure to real estate, including data center assets, making them a potentially valuable addition to a balanced portfolio.
References:
- Equinix: Why Equinix Is Still a Buy
- Digital Realty Trust, Inc. Overview
- CoreSite’s Growth Strategy Post-Acquisition
- Iron Mountain Expands Data Center Services
- SBA Communications and Its Role in Edge Data Centers
- CyrusOne’s Market Position After Acquisition
- Vanguard Real Estate ETF
- Growth Trends in Cloud Computing and AI
- The Importance of Data Sovereignty
- Sustainability Trends in Data Centers