The rise of agentic AI has further increased the demand for GPUs, so much so that companies have decided to set up data centers for the sole purpose of renting out the compute capacity, also known as GPU-as-a-Service (GPUaaS). Some GPUaaS stocks have seen a meteoric rise in share price, mainly because AI inference requires continuous reasoning, along with interaction with other systems and the use of multiple tools.
This has also led to a rise in GPU spot pricing, making it more expensive to set up such operations. However, since the output is measured in cost per token, the most expensive equipment usually offers the best performance and therefore the lowest cost per token, which helps GPUaaS companies improve their margins.
Moreover, the demand is expected to stay high not just because AI agents need resources to work, but also because they need to constantly communicate. This communication is human-to-agent, agent-to-human, and, most importantly, agent-to-agent. Speaking to CNBC on May 9, CoreWeave CEO Mike Intrator touched on this topic:
You are going to see, as we get towards the back of 2026, an enormous acceleration of that leverage that everybody’s waiting for… you’re going to see an inflection as you move through Q3 and Q4 of this year.
This component of the AI trade is expected to continue in the coming months. There are a number of companies that will benefit from this, but the direct beneficiaries will be the ones renting out GPUs to other businesses deploying agentic AI. Our article “7 Best Data Center GPU-as-a-Service Stocks to Buy” tries to identify exactly these stocks.
Our Methodology
To identify the 7 best data center GPU-as-a-Service stocks to buy, we reviewed various data center ETFs and financial media to shortlist companies operating in the data center niche. From these, we selected only those companies that derive a major chunk of their revenue from GPUaaS and can therefore be considered pure-plays. These stocks have also reported recent investor-worthy news and are listed in ascending order of the number of hedge funds holding them.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Note: All share price data in the article is as per market close on May 12.
7. Duos Technologies Group, Inc. (NASDAQ:DUOT)
Number of Hedge Fund Holders: 13
On April 17, Ascendiant Capital Markets maintained a Buy rating on Duos Technologies Group, Inc. (NASDAQ:DUOT) while raising the firm’s price target. The firm increased its price target on the stock from $14 to $17. The price target revision came after DUOT reported an outstanding 2025 result earlier on March 31, with revenue surging to 271% to about $27 million for the full year. After the Asset Management Agreement with New APR Energy, results for the fourth quarter were up by 548% to $9.46 million.
Additionally, Duos Technologies Group, Inc. (NASDAQ:DUOT) shifted away from its old rail business towards data center and AI. The company built more Edge Data Center platforms, launched GPU-as-a-Service, and a high-density EDC configuration. With the creation of a new Technology Solutions unit, the company expects to increase profits. Approximately $1 million in revenue from technology solutions was recorded in 2025, with the company expecting revenue for 2026 to exceed $50 million.
Duos Technologies Group, Inc. (NASDAQ:DUOT) develops and provides intelligent technology solutions across North America. It also develops and deploys edge data center infrastructure and related hosting services, and delivers technology systems, integrated solutions, consulting, and energy-related services.
6. Applied Digital Corp (NASDAQ:APLD)
Number of Hedge Fund Holders: 40
On April 28, John Todaro, an analyst at Needham, assigned a target price of $48 to Applied Digital Corp (NASDAQ:APLD) and maintained a Buy rating on the stock. Owing to the incredible stock performance over the last month, the stock is closing in on Needham’s price target. The firm’s price target still offers 16% upside from the current levels.
On May 4, Applied Digital Corp (NASDAQ:APLD) announced the closing of a $300 million loan from Goldman Sachs, which can be repaid at any time without fees or penalties. This loan will be used to develop and construct the company’s third AI data center at its Polaris Forge 1 campus in Ellendale, North Dakota. The company expects to need additional financing to complete the project. The financing loan acts as a bridge facility with a 364-day maturity and bears interest at the Secured Overnight Financing Rate plus 275 basis points. Saidal Mohmand, Chief Executive Officer of Applied Digital, remarked,
This financing supports the continued development of our third AI data center at Polaris Forge 1 and reflects our disciplined approach to funding projects in line with construction timelines.
Applied Digital Corp (NASDAQ:APLD) builds and operates digital infrastructure for AI and computing companies in North America. The company provides data centers and GPU computing solutions for businesses working in AI. It is headquartered in Dallas, Texas, and was founded in 2021 by Wes Cummins and Jason Zhang.
While we acknowledge the potential of APLD 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 APLD and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Best Data Center GPU-as-a-Service Stocks To Buy.
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