In this article, we take a look at the 10 Best Industrial Stocks Benefiting from the Data Center Boom.
Last week, PwC emphasized that over the next 25 years, the growing demand for data and digital services will drive strong investment in data center capacity.
PwC said that investment in data center infrastructure is projected to rise by 116%, from $53.2 billion to $118.4 billion between 2024 and 2027. It added:
“Hyperscale campuses, colocation facilities, and edge sites will be delivered at speed to meet the surging demand created by steady cloud growth, the rapid adoption of generative AI, and expectations for more compute-intensive AI applications and workloads.”
PwC said that as new facilities come online, the rate of construction of additional structures is expected to slow throughout the 2030s. It added:
“By the 2040s, as the market reaches maturity, investments in buildings and infrastructure will stabilize. Looking further ahead, data center investment will shift away from expanding overall capacity and instead concentrate on maximizing the efficiency, flexibility, and utilization of existing assets.”
With this in mind, let’s take a look at the 10 Best Industrial Stocks Benefiting from the Data Center Boom.
Our Methodology
To compile this list, we identified industrial stocks using the Finviz screener and narrowed them down to companies with exposure to the data center sector. Additionally, industrial real estate investment trusts (REITs) were also considered to come up with this list. Our selection focused on stocks with potential upside based on analyst consensus, placing the stock with the highest potential growth at the top. Additionally, we also included the number of hedge funds holding stakes in these companies as of the fourth quarter of 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Note: All pricing data is as of market close on May 8, 2026.
10. Vertiv Holdings Co. (NYSE:VRT)
Potential Upside:2.95%
Number of Hedge Fund Holders: 112
Vertiv Holdings Co. (NYSE:VRT) is one of the best industrial stocks benefiting from the data center boom. On May 7, Citi increased its price target on Vertiv to $414 from $353 and maintained a Buy rating on the shares, according to a report by TheFly.
Citi emphasized the company’s multi-year visibility to sales and earnings growth, mainly caused by its robust AI-driven data center spending. Additionally, it expects Vertiv to raise its long-term organic growth outlook to range between 12%-24%.
For the first quarter of the year, Vertiv registered a 30% increase in net sales to $2.650 billion, driven by a 23% growth in organic sales.
Vertiv Chief Executive Officer Giordano Albertazzi said the company’s strong financial performance reflects its ability to meet the needs of its customers. He added:
“We’re seeing data center infrastructure requirements evolve significantly, with customers prioritizing optimized design, deployment speed, and operational efficiency – reshaping their approach to deployment. This quarter’s financial performance reflects our ability to meet customers at this critical moment with unique capabilities. Our investments in technology and capacity, combined with strategic acquisitions, are translating into market share gains as customers demand faster deployment, greater reliability, and comprehensive services. As infrastructure density increases and deployment timelines compress, we’re positioned to be the partner customers need to bring their most ambitious projects to life, at scale.”
According to 29 analyst ratings compiled by CNN, 79% rated Vertiv Buy, while 14 rated the stock Hold. Vertiv has a median price target of $350, a 2.95% upside from the current price of $33.97.
Vertiv Holdings Co. (NYSE:VRT) is engaged in the design, manufacturing, and servicing of critical digital infrastructure for data centers, communication networks, and commercial and industrial environments. The company specializes in thermal management, power distribution, and backup power systems, ensuring high efficiency and reliability in mission-critical operations.
9. Powell Industries, Inc. (NASDAQ:POWL)
Potential Upside: 3.43%
Number of Hedge Fund Holders: 30
Powell Industries, Inc. (NASDAQ:POWL) is one of the best industrial stocks benefiting from the data center boom. According to a report by TheFly on May 7, JPMorgan increased its price target on Powell to $360 from $310 while maintaining an Overweight rating on the shares, following the company’s second quarter earnings report.
The price target adjustment comes more than a week after JPMorgan initiated coverage on Powell on April 27, with an Overweight rating and $310 price target. JPMorgan earlier expressed optimism for the company’s growth given its exposure to megatrends such as AI, automation, and electrification.
On May 4, Powell reported a 6% rise in revenues for the second quarter of Fiscal Year 2026 to $296.6 million from $278.6 million in the prior year. The company attributed the growth to a 35% increase in revenues in the commercial & other industrial segment.
During the quarter, Powell said it was awarded a mega electric utility order and a mega data center order, each with a value exceeding $75 million. Additionally, subsequent to the end of the second quarter, the company was also awarded an additional mega data center order valued at $400 million, which is related to a behind-the-meter design of on-site generation assets.
Based on 6 analyst ratings compiled by CNN, Powell has an average price rating of $320, a 3.43% increase from the current price of $309.39.
Powell Industries, Inc. (NASDAQ:POWL) is engaged in the development, design, manufacture, and service of custom-engineered equipment and systems that distribute, control, and monitor the flow of electrical energy and provide protection to motors, transformers, and other electrically powered equipment. The company primarily serves the oil and gas, petrochemical, electric utility, and commercial and other industrial markets.
8. Prologis, Inc. (NYSE:PLD)
Potential Upside: 6.88%
Number of Hedge Fund Holders: 54
Prologis, Inc. (NYSE:PLD) is one of the best industrial stocks benefiting from the data center boom. According to a report by TheFly on May 8, BMO Capital raised the price target on Prologis to $162 from $137 and upgraded the stock’s rating to Outperform from Market Perform, as it cited the company’s exposure to data center demand.
BMO highlighted the company’s ability to benefit from the surging data center demand as both a developer and an industrial landlord, adding that data center suppliers now represent 10% of Prologis’ new leasing volume.
Last month, Prologis reported revenues of $2.3 billion for the first quarter of the year, higher than its $2.14 billion revenues in the same period a year ago. The company also reported net earnings per diluted share of $1.05 for the quarter, compared with $0.63 for the corresponding period in 2025.
Based on 24 analyst ratings compiled by CNN, 63% rated Prologis Buy, while 38% rated it Hold. As of May 8, Prologis has an average price target of $154, a 6.88% upside from the current price of $144.09.
Prologis, Inc. (NYSE:PLD) creates intelligent infrastructure that powers global commerce, seamlessly connecting the digital and physical worlds. The company leases modern logistics facilities to a diverse base of approximately 6,500 customers principally across two major categories: business-to-business and retail/online fulfillment.
7. Cummins Inc. (NYSE:CMI)
Potential Upside: 7.13%
Number of Hedge Fund Holders: 67
Cummins Inc. (NYSE:CMI) is one of the best industrial stocks benefiting from the data center boom. On May 7, Citi increased its price target on Cummins to $770 from $710 while maintaining a Buy rating on the stock, following the company’s strong financial performance in the first quarter, according to a report by TheFly.
Citi attributed the upward price target adjustment to the higher estimates. On May 4, Cummins reported a 3% increase in revenues for the first quarter of the year to $8.4 billion.
The company also announced that it is raising its full-year 2026 revenue guidance to be up 8% to 11%. Cummins Chair and CEO Jennifer Rumsey said the higher 2026 outlook for revenue and profitability is driven by strengthened demand across several key markets. She added:
“We see North America on-highway markets improving, while demand for data center power generation across a range of our products continues to outpace expectations. Through the remainder of 2026, we are well-positioned to deliver strong financial performance, invest in future growth and return cash to shareholders.”
According to 26 analyst ratings compiled by CNN, Cummins has an average price target of $728, a 7.13% upside from the current price of $679.55.
Cummins Inc. (NYSE:CMI) is engaged in the design, manufacture, distribution, and service of a broad portfolio of power solutions. Its products range from diesel, natural gas, electric, and hybrid powertrains and powertrain-related components, among others.
6. Johnson Controls International plc (NYSE:JCI)
Potential Upside: 11.10%
Number of Hedge Fund Holders: 75
Johnson Controls International plc (NYSE:JCI) is one of the best industrial stocks benefiting from the data center boom. According to a report by TheFly on May 7, UBS boosted its price target on Johnson Controls to $170 from $160 while keeping a Buy rating on the stock following the release of the company’s quarterly earnings report.
UBS attributed the price target increase to the company’s potential to achieve meaningful positive revisions over the medium-term. On May 6, Johnson Controls reported an 8% increase in its sales for the second quarter of its fiscal year 2026 to $6.1 billion.
Johnson Controls Chief Executive Officer Joakim Weidemanis highlighted that the company was able to convert sustained demand into consistent growth. He added:
“Orders grew 30% and backlog reached a record $20 billion, reflecting strength in data centers and other high‑growth, technology‑driven operating environments where we differentiate. While we remain early in our Business System journey, we are encouraged by the momentum we are seeing across the organization. With a strong first‑half performance, we are raising our full‑year guidance and remain focused on delivering long‑term value for our customers and shareholders.”
Of the 26 analyst ratings compiled by CNN, 50% rated Johnson Controls Buy, while 38% assigned a Hold rating. As of May 8, the stock has a median price target of $155, an 11.10% upside from the current price of $139.52.
Johnson Controls International plc (NYSE:JCI) is engaged in thermal management, mission-critical building systems, energy efficiency, and decarbonization. The company helps customers use energy more productively, reduce carbon emissions, and operate with precision.
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