In this article, we will look at the 7 Best Data Center REITs to Buy According to Analysts.
On January 13, Andy Power, CEO of Digital Realty, appeared on a CNBC Property Play interview to discuss the state of data center real estate. He noted that as hyperscalers, including Nvidia, Google, Meta, and Amazon, announce more data centers and increase AI capital expenditure, the market has been concerned that the data center REIT might be overbuilding for a market that is still infant.
Andy has been in the real estate sector for more than 25 years. He believes that there is not at all too much construction in the sector. Andy elaborated that this statement is based on actual demand from real customers who have signed long-term 15-year contracts. He noted that, according to JLL, the data center REIT is expected to expand globally from nearly 103 gigawatts to more than 200 gigawatts by 2030. This is driven by increased demand for artificial intelligence, which is rapidly changing the data center landscape and REIT as well.
With that, let’s take a look at the 7 Best Data Center REITs to Buy According to Analysts.
Our Methodology
To curate the list of 7 Best Data Center REITs to Buy According to Analysts, we used screeners, financial media, and Reddit. Using these sources, we identified data center REITs that are popular among analysts and hedge funds. Lastly, we ranked the stock in ascending order of the analyst upside potential. We have limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. This list includes pure-play data center REITs as well as REITs and real estate companies with meaningful exposure to data center infrastructure.
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 Best Data Center REITs to Buy According to Analysts
7. Prologis, Inc. (NYSE:PLD)
Analyst Upside: 6.88%
Number of Hedge Fund Holders: 54
Prologis, Inc. (NYSE:PLD) is one of the Best Data Center REITs to Buy According to Analysts. It is a leading global real estate investment trust focused primarily on logistics and industrial properties, owning, operating, and developing approximately 1.3 billion square feet of facilities across 20 countries on four continents.
The company also leverages its prime land bank near urban power infrastructure to develop data center “powered shells,” securing over 5 GW of power capacity, including 450 MW under construction.
Recently, on May 7, BMO Capital upgraded Prologis, Inc. (NYSE:PLD) to Outperform from Neutral and raised the price target from $137 to $162. The firm noted that the company has the ability to benefit from data center demand. BMO also highlighted that in the first quarter earnings, data center suppliers represented around 10% of the company’s new leasing. The firm expects Prologis, Inc. (NYSE:PLD)’s earnings growth to accelerate based on growing data center demand.
6. Iron Mountain Incorporated (NYSE:IRM)
Analyst Upside: 7.89%
Number of Hedge Fund Holders: 37
Iron Mountain Incorporated (NYSE:IRM) is one of the Best Data Center REITs to Buy According to Analysts. It is an REIT that specializes in information management services, operating through its Global Records and Information Management (RIM) and Global Data Center segments.
Recently, on May 1, Truist analyst Tobey Sommer raised the firm’s price target for Iron Mountain Incorporated (NYSE:IRM) from $130 to $140 and maintained a Buy rating on the shares. The rating follows the company’s fiscal Q1 2026 earnings, released on April 30. During the quarter, the company posted $1.94 billion in revenue, up 21.58% year-over-year and ahead of expectations by $74.59 million. Moreover, the GAAP EPS of $0.48 also topped the expectations by $0.06.
Notably, the Data Center revenue for the quarter grew 47% year-over-year to $255 million, driven by an increase in leasing, pricing, and power ramping. Truist noted that the data center lease trend is expected to drive the stock price higher due to a larger total addressable market.
The company leased 22 megawatts in Q1 and an additional 10 megawatts in April. Management expects to exceed the guidance of more than 100 megawatts.
While we acknowledge the potential of IRM 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 IRM and that has 100x upside potential, check out our report about the cheapest AI stock.
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