You can’t watch the financial news anymore without hearing about data centers. Not everyone is thrilled about the expansion. Critics worry about the environmental and community costs, while supporters say data centers are essential to continued AI growth. But regardless of which side of the issue you’re on, there’s no denying that data centers are booming, and investors are paying attention. Even President Donald Trump urged communities to “let Data Reign” in an August 31 Truth Social post.
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While big tech names like Microsoft and Nvidia gobble up the bulk of AI headlines, there are plenty of lesser-known companies that present opportunities for investors in the data-center world. For example, servers need buildings to house them and equipment to keep them cool. Facilities also need steady supplies of electricity. With demand skyrocketing, many local grids will need to expand significantly.
A Lawrence Berkeley National Laboratory report released by the Department of Energy showed that data centers consumed 4.4% of U.S. electricity in 2023. By 2028, that figure is projected to reach anywhere from 6.7% to 12%. This puts consumption on track to nearly triple at the upper end of that range.
With big tech companies spending billions of dollars on the AI boom, much of that money is flowing to the companies that provide the basic building blocks for AI expansion, including cooling systems and grid connections. Digital Realty, Vertiv and Quanta Services all sit at different points in that buildout.
Digital Realty: Owning the Buildings
Digital Realty (DLR) is one of the world’s largest data-center landlords. The company operates as a real estate investment trust, or REIT, providing investors with an income component in addition to the potential for capital appreciation.
It may not offer the spectacular growth of a company like Nvidia, but housing servers and other computing equipment is the type of “boring” job that’s absolutely necessary for this industry.
At the end of the second quarter, Digital Realty had a record $1.4 billion in annualized base rent at its share from leases that had been signed but had not yet commenced. The company also reported a 25.4% cash increase on renewal leases signed during the quarter.
Part of the reason Digital Realty’s business is so successful is that its customers need spaces with reliable power and network connectivity. Once in place, customers are generally reluctant to move to other facilities because that process can be expensive and disruptive.
The obvious drawback to Digital Realty’s success story is that building data centers is enormously expensive. DLR has to borrow a lot of money to pay for this build-out, which leverages the company and makes it more reliant on capital markets. Higher borrowing and construction costs can make the company less profitable, as could a downturn in demand from its major customers.
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Vertiv: Keeping the Servers Running
While Digital Realty owns the buildings, Vertiv Holdings (VRT) helps keep everything inside them running. Specifically, Vertiv sells power-distribution equipment, battery backups, switchgear and cooling systems. That certainly doesn’t sound as “sexy” as AI chips or automated robots. But without reliable power and cooling, even the most advanced AI chips can’t operate.
Cooling has become especially important as AI servers have grown more powerful. Packing more computing capacity into each rack of servers creates immense amounts of heat, and that heat requires advanced air- and liquid-cooling systems.
Vertiv has been in the right business at the right time. Second-quarter sales were up 24% compared with the prior year, and as of Sept. 16, its stock was up about 75% over the previous 12 months.
Big gains like this mean investors are anticipating the best. If the stock is to continue rising, Vertiv will have to execute particularly well. If any major projects get delayed or postponed, or if AI spending dries up, the stock could come under pressure.
Quanta Services: Connecting Data Centers to the Grid
While Vertiv sells the equipment that manages power inside a data center, Quanta Services (PWR) deals with the bigger issue of how to get electricity to those facilities in the first place. To that end, the company builds and upgrades transmission lines and substations, while also installing electrical systems for large facilities that include data centers.
For the second quarter of 2026, the company reported revenue of $9.56 billion, up from $6.77 billion one year earlier. Adjusted earnings per share climbed from $2.48 to $4.24, while its total backlog reached a record $53.4 billion.
Data centers only account for part of Quanta’s business. Utilities and industrial companies make up much of the rest. But this broad client base ties Quanta to the broader need to modernize the electrical grid. That customer base could provide some protection if AI-related construction slows.
As with Vertiv, Quanta’s premium valuation leaves little room for missteps. Bad weather and permitting problems can delay projects, while labor shortages can raise costs. Falling demand can also stifle stock valuations.
Choosing Among the Three
These three stocks all have exposure to the data-center boom, but they approach it in different ways. Which option is the best for you as an investor depends on the type of exposure you want, along with your investment objectives and risk tolerance.
Digital Realty combines data-center real estate with a dividend.
Vertiv provides the most direct exposure to the power and cooling equipment inside the facilities, along with the greatest valuation risk.
Quanta is a broader bet on the electrical buildout, only part of which depends on data centers.
All three remain vulnerable to a slowdown in data-center spending, not to mention national and local political opposition, which could potentially delay new projects. Their premium valuations also up their risk profiles.
Remember that a fast-growing market or industry doesn’t necessarily mean a stock is a good investment. The price you pay can be as important as the underlying company’s potential.
This article is for educational purposes only and does not constitute investment advice. Past performance does not guarantee future results. You should conduct your own research and consult a financial advisor before making any investment decisions.
