In this article, we will examine the 11 Best Performing Data Center Stocks to Buy Now.
Investors are increasingly treating data centers not just as back-end utilities, but as high-growth engines powering the digital economy, making them a focal point for those seeking both stability and upside in technology-driven markets.
Rightly so, data center stocks have been among the strongest performers this year. They were driven by rising demand for cloud infrastructure and enterprise digital services. Expanding online operations and technology upgrades have significantly increased the need for high-capacity, reliable data centers, boosting revenue for both operators and service providers.
And it’s not just the pure-play data center companies, but strategic investments have also flown in power, cooling, and network infrastructure. Long-term contracts with major cloud and tech clients have positioned a number of these companies to capitalize on sustained growth trends, making them some of the best-performing names in the data center space this year.
READ ALSO: 11 Best Emerging Technology Stocks to Buy Right Now and 12 Best ESG Stocks to Buy Now According to Hedge Funds.
Underlining the impact of data center growth, Mario Azar, Chairman & CEO of infrastructure development company Black & Veatch, discussed the rising demand for power driven by the growth of cloud infrastructure in an interview with CNBC on September 10. He noted that Black & Veatch, with over 110 years in critical infrastructure, has contributed more than a quarter of the United States’ power capacity. Data centers are a major driver of this trend, and the firm has several large-scale power projects planned over the next five to seven years to meet the expanding demand.
Azar also pointed out that the wider energy and infrastructure sectors are experiencing strong growth. Capital expenditure budgets for power-related projects have more than doubled between 2023 and 2025, with further increases expected by 2028, reflecting both data center requirements and broader industrial power needs.
Given this backdrop, let’s turn to our selection of the 11 best-performing data center stocks to buy now.
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Our Methodology
To compile our list of the best-performing data center stocks, we screened U.S.-listed companies that are either pure-play data center operators or have significant exposure to the sector, leveraging ETFs, industry research, and proprietary databases. From this universe, we narrowed the list to stocks delivering the highest year-to-date returns. We then focused on the 11 stocks most widely held by hedge funds, based on Q2 2025 data from Insider Monkey, and ranked them according to the number of hedge fund investors with active positions.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Note: All pricing data is as of market close on September 18, 2025.
11 Best Performing Data Center Stocks to Buy Now
11. VNET Group Inc. (NASDAQ:VNET)
YTD Return: 107.8%
Number of Hedge Fund Holders: 27
VNET Group Inc. (NASDAQ:VNET) is one of the best performing data center stocks to buy now. On September 12, DBS reiterated a Buy rating on VNET with a $12.50 price target, following a nearly 20% rally since the analyst lifted the target from $9 in late July when shares traded near $8.30.
The rating reaffirmation came a day after VNET announced a 40MW wholesale order from a leading internet company for its new Gu’an IDC Campus in the Greater Beijing Area. The project will be delivered in phases and highlights the company’s ability to attract large-scale customers in a competitive market.
Management emphasized that the order will support the client’s use of domestic chips, a market segment expected to be a key driver of computing demand in China. VNET is also deploying advanced liquid cooling technology for this order, designed to reduce energy consumption and improve power utilization efficiency.
The deal reinforces VNET’s execution capabilities at a time when hyperscale demand remains resilient despite broader market uncertainty.
Apart from DBS, Morgan Stanley’s analyst Tom Tang also reiterated his Buy rating on the stock on August 28, with an unchanged price target of $12.00.
10. Applied Digital Corp. (NASDAQ:APLD)
YTD Return: 159.6%
Number of Hedge Fund Holders: 28
Applied Digital Corp. (NASDAQ:APLD) is one of the best performing data center stocks to buy now. On September 15, Craig-Hallum analyst George Sutton reiterated a Buy rating on the company with a $23 price target, citing continued execution in scaling its AI-focused infrastructure.
The update followed the company’s regulatory filing on September 12, in which the company announced progress on its Polaris Forge 1 development. The site, designed to support 1 gigawatt of capacity, will have its first 100-megawatt facility operational in Q4 2025, followed by additional 150-megawatt facilities in 2026 and 2027. These long-term leases are expected to provide steady cash flow and fund future growth.
Applied Digital also broke ground on Polaris Forge 2 in September, a $3 billion AI campus near Harwood, North Dakota, with 200 megawatts of initial critical IT load and potential for expansion. Early operations are targeted for 2026, with full capacity by 2027.
Interestingly, management noted it is in advanced discussions with a U.S.-based investment-grade hyperscaler for an anchor lease. Securing such a customer would broaden Applied Digital’s client mix and demonstrate its capacity to support large-scale AI infrastructure.
The company is also reviewing options for its Cloud Services division to sharpen its focus on data centers, a strategy expected to drive long-term shareholder value.
Applied Digital (NASDAQ:APLD) develops and operates data centers in North America designed for high-performance computing and artificial intelligence workloads.
9. CoreWeave Inc. (NASDAQ:CRWV)
YTD Return: 202.2%
Number of Hedge Fund Holders: 29
CoreWeave Inc. (NASDAQ:CRWV) is one of the best performing data center stocks to buy now. On September 19, Loop Capital analyst Ananda Baruah initiated coverage on CoreWeave (NASDAQ:CRWV) with a Buy rating and a $165 price target, citing meaningful earnings potential and the likelihood of valuation multiple expansion over time.
Baruah said that CoreWeave is positioned as the largest among a small group of “Neocloud” providers, a category increasingly central to NVIDIA, major hyperscalers, and leading AI labs building frontier models. He argued that investor sentiment undervalues the depth of commitment from hyperscalers and AI labs to next-generation innovation, particularly as NVIDIA’s Blackwell architecture scales and new demand emerges from sovereign cloud initiatives.
The analyst’s projections underscore this view. For 2027, he pencils in revenue and EBITDA at $17.9 billion and $12.8 billion, respectively, marginally above consensus estimates of $17.8 billion and $12.7 billion. The $165 target implies 10x EV/EBITDA on 2027 numbers, a valuation the analyst believes will be supported by continued demand for high-performance cloud infrastructure.
CoreWeave (NASDAQ:CRWV) provides cloud infrastructure built for GPU-intensive workloads such as artificial intelligence, machine learning, and visual effects. Founded in 2017, it operates data centers in the U.S. and Europe and serves enterprise and research clients under long-term agreements.
8. GDS Holdings Ltd. (NASDAQ:GDS)
YTD Return: 68.9%
Number of Hedge Fund Holders: 37
GDS Holdings Ltd. (NASDAQ:GDS) is one of the best performing data center stocks to buy now. On August 21, 2025, Bank of America analyst Daley Li reaffirmed a Buy rating on GDS Holdings Ltd. (NASDAQ:GDS) with a price target of $47.60 after the company reported stronger-than-expected Q2 results.
Q2 revenue rose 12% year-over-year, while adjusted EBITDA increased 11%, both above consensus, supported by rising demand in China and new customer wins that lifted utilization rates.
International operations, run under the DayOne unit, showed exceptional momentum. Revenue from the segment expanded 1.4x year-over-year, while adjusted EBITDA grew 1.7x, reflecting rapid overseas adoption and successful execution of capacity expansion.
Despite the solid Q2 performance, the company maintained its FY 2025 guidance, which Li interprets as conservative given the operational progress. He noted that domestic demand resilience, coupled with accelerating international scale, supports a durable growth trajectory.
GDS Holdings Ltd. (NASDAQ:GDS) is a leading developer and operator of high-performance data centers in China. The company provides colocation, managed hosting, and cloud services to enterprise customers, hyperscalers, and financial institutions.
7. Credo Technology Group Holding Ltd. (NASDAQ:CRDO)
YTD Return: 144.7%
Number of Hedge Fund Holders: 48
Credo Technology Group Holding Ltd. (NASDAQ:CRDO) is one of the best performing data center stocks to buy now. On September 18, William Blair analyst Sebastien Naji initiated coverage on Credo with a Buy rating, underscoring the company’s leadership in active electrical cables for AI-driven data centers.
Naji notes that Credo’s vertically integrated strategy, which delivers complete cable solutions instead of individual components, has enabled it to offer cost-effective, power-efficient connectivity, making it a trusted supplier for hyperscalers such as Amazon and Microsoft.
The analyst believes that Credo’s growth trajectory extends beyond its established cable business. The company is building momentum in optics, with ambitions to capture a meaningful portion of the $7 billion inside data center optical market. Additionally, its PCIe Gen 6 retimer solution is expected to enter commercialization soon, adding a new revenue stream.
Demand from AI clusters and hyperscale data centers for faster and more efficient connectivity is rising substantially, and Credo’s proprietary technology helps address key bottlenecks. Naji views this as a basis for the stock’s premium valuation, underpinned by expectations of strong revenue growth in the coming years.
Credo Technology Group Holding Ltd. (NASDAQ:CRDO) designs and develops high-speed connectivity solutions for data centers and cloud infrastructure.
6. Super Micro Computer Inc. (NASDAQ:SMCI)
YTD Return: 47.3%
Number of Hedge Fund Holders: 48
Super Micro Computer Inc. (NASDAQ:SMCI) is one of the best performing data center stocks to buy now. On September 17, Northland Securities analyst Nehal Chokshi reiterated a Buy rating on Super Micro with an unchanged price target of $59, highlighting continued confidence in the company’s growth trajectory.
The call followed Bernstein SocGen analyst Mark Newman’s initiation of coverage a day earlier with a Market Perform rating and a $46 target, citing concerns around slowing growth, aggressive guidance, and weak cash conversion despite Super Micro’s strong recent performance. According to the analyst, Super Micro has been one of the notable growth stories in the sector, reporting 46.6% revenue growth over the last 12 months.
With the recent spate of cautious updates, sentiment on the stock remains mixed, with only about a third of analysts rating the stock a Buy after its nearly 50% year-to-date rally.
That said, on the operational front, the company continued to advance its product lineup. On September 11, Super Micro announced the broad availability of its NVIDIA Blackwell Ultra solutions, including Plug-and-Play NVIDIA HGX B300 systems and GB300 NVL72 racks. These offerings are pre-validated at system, rack, and data center scale, designed to accelerate deployment and deliver industry-leading performance and compute density.
Super Micro Computer Inc. (NASDAQ:SMCI) designs and manufactures high-performance servers and storage systems optimized for AI, cloud, and enterprise computing.
5. Ciena Corp. (NYSE:CIEN)
YTD Return: 60.8%
Number of Hedge Fund Holders: 57
Ciena Corp. (NYSE:CIEN) is one of the best performing data center stocks to buy now. On September 17, Bank of America analyst Tal Liani raised his price target on Ciena Corp. (NYSE:CIEN) to $155 from $135 while maintaining a Buy rating. His reason for raising the price target was based on accelerating cloud momentum and strong secular demand for optical equipment.
The call comes ahead of Ciena’s upcoming Investor Innovation Day on September 25, where management is expected to outline its long-term strategy.
Liani had already boosted his target earlier this month, from $95 to $135 on September 5, after Ciena delivered Q3 results that exceeded Street expectations. Management guided for an impressive 17% annual growth rate through FY2025 and FY2026, driven by heightened activity from hyperscalers and stabilizing demand from service providers.
With Oracle’s strong results reinforcing broader cloud investment trends, the analyst believes Ciena is well-positioned for sustained growth over the next several quarters.
Ciena Corp. (NYSE:CIEN) is a global leader in networking systems, services, and software, best known for its optical and routing solutions that power cloud and telecommunications infrastructures. The company serves hyperscalers, service providers, and enterprises worldwide.
4. Seagate Technology Holdings plc (NASDAQ:STX)
YTD Return: 147.2%
Number of Hedge Fund Holders: 71
Seagate Technology Holdings plc (NASDAQ:STX) is one of the best performing data center stocks to buy now. On September 16, Bernstein SocGen analyst Mark Newman initiated coverage of Seagate with an Outperform rating and a $250 price target. As reasons for his positive rating, he pointed to both near-term and long-term drivers supporting growth.
The analyst pointed to a rebound in hard disk drive (HDD) demand and noted Seagate’s edge in Heat-Assisted Magnetic Recording (HAMR), a technology expected to drive future market share gains. He added that, even after the stock’s recent rally, the shares still look reasonably valued given expectations for EPS growth of more than 20% a year.
His $250 target implies 18.5x FY27 EPS of $13.27, roughly in line with the company’s five-year historical average, which he characterized as conservative considering Seagate’s expanding technology edge and robust earnings and free cash flow trajectory.
Seagate Technology Holdings plc (NASDAQ:STX) is a global leader in data storage solutions, specializing in hard disk drives, solid-state drives, and advanced storage technologies.
3. Western Digital Corp. (NASDAQ:WDC)
YTD Return: 124.0%
Number of Hedge Fund Holders: 74
Western Digital Corp. (NASDAQ:WDC) is one of the best performing data center stocks to buy now. The company’s shares have risen by over 135% year-to-date, and although these gains have made existing investors richer, new recommendations are facing a valuation question.
Over the last week or so, two noticeable coverage initiations on WDC have been made, which have clearly communicated their cautious stance. These two analysts are from Roth MKM and Bernstein SocGen’s analyst Mark Newman (both with a price target of $96).
These analysts have raised concerns about competition and believe the valuation is fair, taking into account the company’s growth prospects. However, the broader consensus remains positive, with 75% of analysts holding Buy or equivalent ratings. In fact, the majority of analysts with a Buy rating have also substantially raised their price targets.
The latest among them are analysts from Mizuho and Benchmark Co., who now have price targets of $120 and $115, respectively, compared to $87 and $85 previously.
The analyst from Mizuho sees upside for Western Digital, citing tighter supply and rising prices in the NAND and HDD markets. The analyst expects further price gains into late 2025 and lifted storage sector targets, underpinning a still healthy growth outlook for the stock.
Western Digital Corp. (NASDAQ:WDC) is a leading global provider of data storage solutions, offering both hard disk drives (HDDs) and solid-state drives (SSDs) to support the consumer, enterprise, and hyperscale data center markets.
2. Micron Technology Inc. (NASDAQ:MU)
YTD Return: 90.1%
Number of Hedge Fund Holders: 94
Micron Technology Inc. (NASDAQ:MU) is one of the best performing data center stocks to buy now. On September 19, 2025, TD Cowen analyst Krish Sankar raised his price target on Micron to $180 from $150 while maintaining a Buy rating. Sankar believes the stock can extend its recent outperformance, with momentum supported by average selling price (ASP) trends, even as he sees limited scope for further multiple expansion and expects growth to be driven primarily by book value.
Micron is scheduled to report its Q4 FY25 results on September 23, with most previews leaning positive following the stock’s nearly 90% year-to-date rally.
However, some analysts remain cautious and Morgan Stanley’s Joseph Moore is the most prominent among them. On September 17, 2025, he said that investor sentiment is mixed and characterized Micron as a “noisy story”. Despite this, he sees potential for shares to climb further on renewed interest in high-bandwidth memory (HBM).
Moore also pointed to structural challenges, including the risk of DRAM oversupply if excess wafer capacity persists, and questioned whether HBM growth projections might outpace processor revenue. He flagged execution risk as Micron works to improve yields and scale production.
Nevertheless, he concluded that Micron is well-placed, with long-term demand drivers in AI and data center growth supporting the investment case.
Micron Technology Inc. (NASDAQ:MU) is a leading provider of memory and storage solutions, including DRAM, NAND, and high-bandwidth memory.
1. Broadcom Inc. (NASDAQ:AVGO)
YTD Return: 49.3%
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the best performing data center stocks to buy now. On September 16, TD Cowen analyst Joshua Buchalter reiterated a Buy rating on the stock with a $370 price target. Earlier, on September 5, he had also reaffirmed the same stance following strong performance and updates on the company’s ramp of TPU v7.
Broadcom recently confirmed a major $10 billion order after converting a key customer opportunity, underscoring its growing weight in the AI semiconductor market. Management commentary also pointed to FY26 revenue growth in AI well above earlier forecasts, with the segment expected to more than double year-over-year.
According to the analyst, Broadcom may face some margin pressure as its AI business grows, but the deal is large enough to add substantially to the total profit of the company. CEO Hock Tan’s contract has also been extended through 2030, which also provides visibility for the company’s long-term strategy.
Broadcom remains well-positioned to capitalize on accelerating demand for custom silicon, supported by a robust order book and expanding AI product cycle.
Broadcom Inc. (NASDAQ:AVGO) is a global technology company that designs, develops, and supplies a wide range of semiconductor and infrastructure software solutions.
While we acknowledge the potential of AVGO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AVGO and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
