In this article, we will discuss: 7 Best Data Center Hardware Stocks to Invest in.
On April 23, Reuters reported that Nokia CEO Justin Hotard cautioned that Europe risks slipping behind the United States and China in AI data center investment because of infrastructural gaps and insufficient investments. Hotard told Reuters that “Europe doesn’t have the infrastructure,” adding that the investment rate “is not enough” and that connection and data center capacity are required. He said if infrastructure lags, “business and developers will move to where that is,” naming China and the United States as current leaders.
Hotard said that data centers represent 3% of EU electricity demand, with consumption anticipated to skyrocket due to AI. Reuters quoted Amazon, which stated in February that challenges in acquiring power grid connections are impeding its European expansion. Nokia is branching out into AI, stating that its AI and cloud division accounts for 8% of group sales and projects that its addressable market would grow by 27% a year through 2028, proving rising demand despite geographical limitations.
With that said, here are the 7 Best Data Center Hardware Stocks to Invest in.
Photo from Oracle website
Methodology:
We used screeners to identify Data Center Hardware Stocks and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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).
7. Celestica Inc. (NYSE:CLS)
On April 29, Goldman Sachs raised Celestica Inc. (NYSE:CLS)’s price target from $430 to $475. It maintained a “Buy” rating. The firm noted that the company “beat on earnings.” However, it missed revenue in Enterprise because of component shortages in memory, power supply, and optics.
On April 27, Celestica Inc. (NYSE:CLS) had Q1 2026 sales of $4.05 billion with 53% growth YoY. The company had GAAP EPS of $1.83 and adjusted EPS of $2.16. Margins improved, with GAAP operating margin hitting 6.7% and adjusted operating margin 8.0%.
CEO Rob Mionis said that the firm “delivered a strong first quarter.” He added that the company witnessed fast growth in its CCS division and improved profitability.
The corporation lifted its 2026 sales forecast to $19.0 billion and adjusted EPS to $10.15. It expects Q2 2026 revenue to be between $4.15 billion and $4.45 billion and adjusted EPS to be between $2.14 and $2.34.
Celestica Inc. (NYSE:CLS) delivers global supply chain solutions for equipment manufacturers and service providers. It works in two divisions, which are Advanced Technology Solutions and Connectivity and Cloud Solutions.
6. Dell Technologies Inc. (NYSE:DELL)
On April 15, Dell Technologies Inc. (NYSE:DELL) CEO Michael Dell told CNBC Television that U.S. lawmakers should avoid blocking artificial intelligence development, warning that overregulation could allow rivals to gain an advantage. Dell opposed Senator Bernie Sanders’ proposed data center moratorium. He called it “not a great idea.” He also argued that slowing or regulating it would give a geopolitical edge to competitors.
Dell pointed out AI as a “highly competitive” global competition, advocating sustained big investments to maintain US leadership. “If we want to advance as a society…we need AI,” he continued, stressing the importance of energy efficiency and cautious data center placement.
Regarding export limits, Dell stated that it benefits the United States to spread its technology stack abroad, but he cautioned that “super powerful aspects” should remain out of the hands of competitors.
He focused on the industry’s complexity and stated that semiconductor supply chains span “20 or 30 countries,” with no single nation controlling them.
Dell Technologies Inc. (NYSE:DELL) is a technology company. It operates in two segments: Infrastructure Solutions Group (ISG) and Client Solutions Group.
While we acknowledge the potential of DELL 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 DELL 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 Hardware Stocks to Invest in.
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center