In this piece we will look at the 5 Best Data Center Stocks That Are Cheaper Than the S&P 500. Please visit 7 Best Data Center Stocks That Are Cheaper Than the S&P 500 if you’d like to see an extended list and how we came up with the list of Best Data Center Stocks That Are Cheaper Than the S&P 500.
5. Constellation Energy Corporation (NASDAQ:CEG)
Forward P/E Ratio: 22.33
Number of Hedge Fund Holders: 79
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy supplier specializing in reliable, emissions-free energy for businesses, homes, and public sector customers. The company operates one of the largest fleets of nuclear power plants in the US and has signed high-profile power agreements directly with tech giants, including Microsoft. Constellation Energy Corporation (NASDAQ:CEG) ranks among our Best Data Center Stocks That Are Cheaper Than the S&P 500.
The share price of Constellation Energy has gained more than 10% over the past 5 days after a period of prolonged volatility. The gains are mostly driven by strong momentum carried forward from the company’s fiscal Q1 2026 earnings released last month, and also the increasing demand for nuclear energy for AI data centers.
Recently, on June 11, Shahriar Pourreza from Wells Fargo maintained a Buy rating on the stock with a price target of $516. The bullish sentiment is driven by strong Q1 earnings. During the quarter, Constellation Energy delivered adjusted EPS of $2.74, surpassing consensus estimates of $2.61. The revenue also improved 63.8% year-over-year to $11.12 billion, surpassing the estimates of $8.69 billion.
Notably, the company secured net metering approval to co-locate a large-scale data center at its Freestone site. Moreover, the nuclear fleet achieved a 92.3% capacity factor, generating 40 million megawatt-hours. Management affirmed its full-year 2026 adjusted operating EPS guidance of $11.00 to $12.00.
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy supplier specializing in reliable, emissions-free energy for businesses, homes, and public sector customers.
4. Oracle Corporation (NYSE:ORCL)
Forward P/E Ratio: 22.89
Number of Hedge Fund Holders: 115
Oracle Corporation (NYSE:ORCL) is one of the Best Data Center Stocks That Are Cheaper Than the S&P 500. Recently, on June 15, Mizuho reiterated an Outperform rating on Oracle Corporation (NYSE:ORCL) with a price target of $320. The rating comes after the company reported record quarterly revenue during its fiscal Q4 2026 earnings.
During the quarter, Oracle posted a record $19.18 billion in revenue, reflecting 21% year-over-year growth and topping the estimates of $19.09 billion. The EPS of $2.11 also topped $1.96. The performance was driven by a 93% year-over-year surge in Cloud Infrastructure revenue, which reached $5.8 billion. Management noted that the segment benefited from an unprecedented surge in AI-driven customer demand.
Moreover, Oracle also reaffirmed its aggressive fiscal 2027 revenue guidance of $90 billion and raised its non-GAAP EPS target to $8.05. Mizuho sees the fiscal 2027 revenue guidance as conservative. It believes Oracle’s bring-your-own-cloud and prepayment model position the company to eventually self-fund its growth.
Oracle Corporation (NYSE:ORCL) provides information technology related products and services to enterprises, through its main business segments: Cloud and License, Hardware, and Services. The company is based in Austin, Texas and was founded on June 1977 by Lawrence Joseph Ellison, Robert Nimrod Miner, and Edward A. Oates.
3. Meta Platforms, Inc. (NASDAQ:META)
Forward P/E Ratio: 18.73
Number of Hedge Fund Holders: 262
Meta Platforms, Inc. (NASDAQ:META) is one of the Best Data Center Stocks That Are Cheaper Than the S&P 500. Wall Street is bullish on the stock as the analysts’ 12-month average price target suggests more than 41.83% upside from the current level.
Recently, on June 17, Evercore ISI reiterated a Buy rating on Meta Platforms, Inc. (NASDAQ:META) with a price target of $930. A few days earlier, on June 9, Truist also reiterated a Buy rating on the stock with a $840 price target. The positive ratings are based on the company’s launch of new paid subscription plans.
Meta introduced consumer and business subscriptions across its Family of Apps, alongside a new Meta One AI subscription suite. Moreover, App-level Plus plans are rolling out across Facebook, Instagram, and WhatsApp. Meta One AI tiers combine app perks with expanded Meta AI access, while business and creator tiers add verification, discovery tools, insights, and workflow features.
Evercore ISI sees the move as a move to diversify revenue. The firm expects a modest revenue impact but a more meaningful boost to operating income over time, given the high-margin nature of subscriptions. Near-term impact is expected to be limited due to phased availability and likely low initial conversion rates. That said, the firm notes that even modest penetration across Meta’s 3.6 billion-plus daily user base could eventually build into a significant high-margin revenue stream.
On the other hand, Truist estimates the subscription business could generate over $20 billion in high-margin revenue by fiscal 2030, representing roughly 5% of total revenue. The projection assumes user penetration of around 3%, in line with Google’s current subscription rate. The firm sees subscriptions as a growth extender, helping Meta sustain momentum beyond its already strong digital advertising performance.
Meta Platforms, Inc. (NASDAQ:META) develops products that allow people to share and connect with their family and friends using PCs, mobile devices, virtual reality (VR) headsets, and AI glasses. Some of its well-known apps include Facebook, Instagram, and WhatsApp. It operates in the Reality Labs (RL) and Family of Apps (FoA) segments.
2. NVIDIA Corporation (NASDAQ:NVDA)
Forward P/E Ratio: 21.16
Number of Hedge Fund Holders: 275
NVIDIA Corporation (NASDAQ:NVDA) ranks 2nd on our list of Best Data Center Stocks That Are Cheaper Than the S&P 500. On June 9, Reuters reported that OpenAI is in talks to lease a massive 10-gigawatt data center campus across federal and private land in Ohio. NVIDIA Corporation (NASDAQ:NVDA) is expected to play a key financial and supply role in this deal.
The report noted that the campus is estimated to cost at least $500 billion to build, including the chips, labor, power, and other inputs. Reuters highlighted that OpenAI is expected to control the equipment under a 20-year lease, with payments beginning once operations start. The first phase is expected to come online in 2028. This facility is expected to be developed by SB Energy, a SoftBank unit, on Department of Energy land in southern Ohio. Some portions of the facility are also expected to acquire private land. Reuters noted that it would rank among the largest data center projects ever attempted.
The role of NVIDIA Corporation (NASDAQ:NVDA) as per the report is twofold. Firstly, it will supply hardware for the facility, and secondly, the company is also expected to provide a financial guarantee for OpenAI’s lease, making it a significant stakeholder in the project’s success.
NVIDIA Corporation (NASDAQ:NVDA) is a fabless semiconductor and AI computing company that designs GPUs, AI accelerators, Application Programming Interfaces (APIs), and system-on-a-chip units. Through its CUDA ecosystem, the company enables industries ranging from autonomous vehicles to scientific research by advancing AI, accelerated computing, and data center infrastructure.
1. Microsoft Corporation (NASDAQ:MSFT)
Forward P/E Ratio: 20.47
Number of Hedge Fund Holders: 282
Microsoft Corporation (NASDAQ:MSFT) ranks as the Best Data Center Stocks That Are Cheaper Than the S&P 500. Although the stock has declined roughly 21% on a year-to-date basis over macroeconomic concerns and massive AI capital expenditure forecasts, the Street expects more than 44% upside over the next 12 months.
Recently, on June 15, Reuters reported that Microsoft Corporation (NASDAQ:MSFT) is facing a lawsuit from the shareholders accusing the company of securities fraud, with plaintiffs claiming it concealed slowing growth in its Azure cloud business and downplayed the cost of its AI infrastructure buildout.
According to Reuters, the case was filed in Seattle federal court and was followed by a 10% single-day drop in Microsoft’s stock on January 29, which wiped out roughly $357 billion in market value. The trigger for the lawsuit was the company’s fiscal second-quarter earnings, which showed Azure revenue growth slipping to 39% from 40% the prior quarter, with a further projected slowdown to 37%–38%. Moreover, the capital spending also came in at $37.5 billion, up 66% year-over-year and above analyst expectations.
The lawsuit alleges Microsoft failed to adequately disclose that AI-related investments, including its Copilot chatbot and OpenAI partnership, were straining resources and constraining Azure’s growth capacity. Microsoft has called the claims “without merit” and says it will vigorously defend itself.
That said, TD Cowen maintained a Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a $540 price target on June 4. The firm highlighted that the company has launched seven new self-built AI models designed for fine-tuning and cost optimization. TD Cowen sees this as a meaningful shift in how Microsoft approaches AI development. The firm also noted that these models will reduce the company’s dependency on external frontier labs for AI capabilities.
Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.
While we acknowledge the potential of MSFT to grow, 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 MSFT and that has 100x upside potential, check out our report about the cheapest AI stock.
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