In this article, we take a look at the 8 Best Small Cap Data Center Stocks to Buy.
Last week, S&P Global reported that private equity investment in US data centers reached its highest level in five years in 2025, jumping to $45.70 billion. Citing its own Market Intelligence data, S&P said this accounts for 72% of the overall $63.35 billion investment in the nation’s data center space, including transactions not backed with private equity.
S&P Global said private equity investors are pouring billions into digital infrastructure as artificial intelligence (AI) is driving unprecedented demand for data centers. It added:
“The private equity-backed investment total was driven by one deal: the planned $40 billion acquisition of Aligned Data Centers LLC by a group of investors including MGX Fund Management Ltd., Global Infrastructure Management LLC, Microsoft Corp., X.AI LLC, NVIDIA Corp., Temasek Holdings (Pvt.) Ltd., Kuwait Investment Authority and BlackRock Inc.”
Citing insights from JLL Data Center Solutions Vice Chairman Curt Holcomb, the report noted that the country is at the “beginning of a data center supercycle development process”.
Holocomb explained that this refers to a period of prolonged deep development for three to five years, which is driven by a severe supply-and-demand imbalance where demand exceeds available supply.
According to data from 451 Research from S&P Global Energy Horizons, the U.S. has a total of 3,988 data centers as of the third quarter of 2025. Of these, 2,615 are operational, 1,108 are planned, and 265 are under construction.
S&P Global cited the state of Virginia as the capital of America’s digital infrastructure, with 757 total data centers, including 382 operational facilities and 306 more in the planning stages. It added:
“However, other states are preparing to capture the next wave of digital growth. While Virginia’s planned facilities ensure its continued dominance, the combined pipelines of Ohio, with 111 planned and under construction, Arizona, with 102, and Georgia, with 97, signal a dramatic decentralization of cloud computing infrastructure.”
With the continued investment in data centers, let’s take a look at the 8 Best Small Cap Data Center Stocks to Buy.
Our Methodology
To compile our list of the best data center stocks, we leveraged ETFs, industry research, and proprietary databases to screen for U.S.-listed companies that are either pure-play data center operators or have significant exposure to the sector or benefit from cloud infrastructure growth. We limited our search to stocks with a market capitalization of below $2 billion. From this pool, we selected the 8 stocks most widely owned by hedge funds, based on Q4 2025 filings from Insider Monkey’s database. These names were then ranked by the number of hedge funds holding positions in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 pricing data is as of market close on May 15, 2026.
8. Crexendo, Inc. (NASDAQ:CXDO)
Market capitalization: $320.59 million
Number of Head Fund Holders: 7
Crexendo, Inc. (NASDAQ:CXDO) is one of the best small cap data center stocks to buy. In the past year, the stock has surged 65.94% while it recorded a 49.17% jump year-to-date. Crexendo continues to receive a strongly positive consensus view, with all six analysts covering it rating it Buy, according to ratings compiled by CNN. The stock currently has a median price target of $11, an 11.22% upside from the current price of $9.89.
On May 7, TheFly reported that Lake Street analyst Eric Martinuzzi increased the price target on Crexendo to $11 from $9 while maintaining a Buy rating on the stock. The analyst attributed the price increase to the company’s positive first-quarter financial performance.
On May 6, Crexendo reported a 29% increase in consolidated total revenue for the first quarter of the year, to $20.7 million, up from $16.1 million in the same quarter a year ago. The company reported a GAAP net income of $0.6 million alongside non-GAAP net income of $3.3 million.
Crexendo CEO and Chairman Jeff Korn emphasized that the company was able to extend its GAAP profitability streak to 10 consecutive quarters, despite absorbing acquisition-related expenses related to Estech Systems (ESI). He added:
“The ESI acquisition is performing ahead of our expectations and is already contributing meaningfully to both revenue and operational momentum. Integration is progressing well, with strong alignment across sales, operations, and engineering, and we are beginning to see early synergies that we expect to build on overtime. Our Q1 results only included 1 month of ESI contributions and I am excited about the impact we will see going forward from this significant acquisition.”
Crexendo, Inc. (NASDAQ:CXDO) is a software technology company that provides a cloud communication platform and services, video collaboration, and managed IT services tailored to businesses of all sizes.
7. Hyliion Holdings Corp. (NYSE:HYLN)
Market Capitalization: $832.79 million
Number of Hedge Fund Holders: 9
Hyliion Holdings Corp. (NYSE:HYLN) is one of the best small cap data center stocks to buy. On May 12, Hyliion reported research and development service revenue of $2.8 million, approximately 479% higher than the $489,000 it generated in the same period a year ago.
The company attributed the revenue growth to an acceleration of work under its contracts with the Office of Naval Research, including the construction of the 800-kilowatt KARNO Power Module, which is being delivered to the Navy. During the quarter, Hyliion commenced the building of the said power module, with completion expected this year.
Hyliion said the 800-kilowatt architecture also serves as the foundational building block for the company’s data center offering, scalable to 2.4 and 3.2 megawatts to match the modular power requirements of data center customers.
For this year, the company is maintaining full-year revenue guidance of approximately $10 million from R&D services and potential initial sales to commercial customers, following the commercialization of the 200-kilowatt KARNO Power Module, expected late in the year.
Hyliion Holdings Corp. (NYSE:HYLN) provides innovative solutions that enable clean, flexible, and affordable electricity production. The Company’s primary focus is to provide modular power plants that can operate on various fuel sources to future-proof against an ever-changing energy economy.
6. Soluna Holdings, Inc. (NASDAQ:SLNH)
Market Capitalization: $251.26 million
Number of Hedge Fund Holders:11
Soluna Holdings, Inc. (NASDAQ:SLNH) is one of the best small cap data center stocks to buy. In a Securities and Exchange Commission (SEC) filing on May 11, the company issued a prospectus on the planned resale of 2,459,400 common shares with a par value of $0.001 per share. The offering includes 2.4 million warrant shares issuable to YA II PN, LTD upon exercise of a warrant and 59,400 merger shares issuable to Harmattan Energy Ltd., formerly Soluna Technologies, Ltd.
Meanwhile, earlier this month, Soluna said it is now in full compliance with all NASDAQ continued listing requirements as it received notice from the exchange that it has regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2).
“We’ve done the work to meet Nasdaq’s requirements, and more importantly, to strengthen the business underneath it. Our focus remains on disciplined execution, scaling our Renewable Computing platform, and creating durable value for shareholders,” Soluna Holdings CEO John Belizaire said.
Soluna Holdings, Inc. (NASDAQ:SLNH) designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources. The company’s pioneering data centers are strategically co-located with wind, solar, or hydroelectric power plants to support high-performance computing applications, including Bitcoin Mining, Generative AI, and other compute-intensive applications.
While we acknowledge the potential of SLNH 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 SLNH and that has 100x upside potential, check out our report about the cheapest AI stock.
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