In this article, we will take a look at the Top 10 Stocks Offering High Upside Potential in Data Centers and AI.
The artificial intelligence boom has pushed valuations in the equity markets to elevated levels, according to strategists at Bank of America. That’s evident, as the S&P 500 is trading at 23 times its forward earnings, well above its two-decade average of 16, owing to its significant exposure to the “magnificent seven” groups of tech giants at the heart of the AI trade.
The S&P 500 value has increased by approximately $17 trillion since it bounced off its April low, attributed to the ongoing AI trade. The significant value increase comes at the back of companies ramping up AI investments in a bid to strengthen their competitive edge and launch new products and services. Likewise, eight of the tech companies valued at over $1 trillion are all tied to AI.
Amid the AI boom rhetoric surrounding a potential bubble, are already sending shivers down Wall Street. Billionaire Jeff Bezos is the latest high-profile personality to join the chorus reiterating that AI is in an industrial bubble. According to Bezos, some stock prices are disconnected from fundamentals as part of the AI trades.
“The [bubbles] that are industrial are not nearly as bad, it can even be good, because when the dust settles and you see who are the winners, societies benefits from those inventions. That is what is going to happen here too. This is real, the benefits to society from AI are going to be gigantic,” Bezos said
Bezos joins OpenAI CEO Sam Altman and Goldman Sachs CEO David Solomon, who have raised concerns about market levels amid the AI boom.
Amid the concerns, there are artificial intelligence and data center investment plays currently trading at discounted valuations with significant upside potential.
Source:Pixabay
Our Methodology
To identify Top Stocks Offering High Upside Potential in Data Centers and AI, we used ETFs and financial media reports to identify popular AI and data center stocks, then selected the top 30 most popular stocks with the highest upside. We then narrowed our list to companies deeply engaged in AI or data‑center development, showing more than 30% upside potential as of November 18 and notable hedge fund interest in Q2 2025. Finally, we arranged the selected stocks in ascending order of their upside potential.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Top Stocks Offering High Upside Potential in Data Centers and AI
10. Meta Platforms Inc. (NASDAQ:META)
Stock Upside Potential: 38.89%
Number of Hedge Fund Holders: 260
Meta Platforms Inc. (NASDAQ:META) is one of the top stocks offering high upside potential in data centers and AI. On November 13, Wedbush added Meta Platforms Inc. (NASDAQ:META) to its Best Ideas list and kept its $920 price target, pointing to stronger sentiment after a solid Q3.
The firm said Meta’s higher spending makes sense given the push to weave AI deeper into its ad and content systems, and it highlighted steady gains in the core advertising business, progress from Meta AI and Superintelligence Labs, and new AI-driven hardware. On October 29, Meta reported a strong third-quarter, posting EPS of $7.25 versus $6.69 expected and surpassing $50 billion in revenue for the first time.
Earlier on October 30, Meta Platforms Inc. announced plans to raise $30 billion through its largest bond offering. The company is to raise $30 billion in a six-part bond sale with maturities ranging from five to 40 years. The bond amounts are to range between $4 billion and $6.5 billion. The company has already struck a $27 billion financing deal with Blue Owl Capital to fund its biggest data center project in Louisiana.
The $30 billion capital raise comes as the tech giant’s race against time to fund costly artificial intelligence infrastructure. Like other tech heavyweights, Meta finds itself in a period of heightened investments in AI as it seeks to enhance its offerings. The company is also spending big to attract and retain AI researchers and engineers. Likewise, the investment spree has resulted in significant cost pressures, with employee compensation costs emerging as the second-largest contributor to the cost increase.
Meta Platforms Inc. (NASDAQ:META) is a social networking company that builds massive, AI-focused data centers globally to power its AI services and future technologies. It invests billions in infrastructure, custom-designed chips, and sustainable practices, including renewable energy and water conservation. These facilities address the immense computational needs for AI development, personalized content delivery, and future platforms, such as universal AI agents and immersive experiences.
9. Oracle Corp. (NYSE:ORCL)
Stock Upside Potential: 60.34%
Number of Hedge Fund Holders: 124
Oracle Corp (NYSE:ORCL) is one of the top stocks offering high upside potential in data centers and AI. On November 16, Jefferies analyst Brent Thill reaffirmed his Buy rating on Oracle Corp (NYSE:ORCL) and assigned a $400 price target.
Earlier on November 6, Oracle Corporation signed a strategic partnership with Defense Technologies to deliver artificial intelligence innovations for global defense and national security customers.
The two companies are joining forces to provide access to sovereign cloud and AI solutions across Oracle Cloud Infrastructure. The ultimate goal is to enable clients to stay ahead of adversaries, benefit from the latest AI innovations, and reduce costs.
Likewise, defense customers will be able to deploy sovereign AI-enabled software products at scale using Oracle’s distributed cloud services,
“Oracle is committed to ensuring its cloud can support the most demanding missions in defence and national security,” said Jason Rees, Senior Vice President, Technology Engineering, and Oracle EMEA. “Through our newly launched Defense Ecosystem, we are creating an environment where sovereign innovation can scale. This collaboration with Defence Technologies provides an immediate proof point, showing how founding members, like Whitespace, are already leveraging the program to deliver sovereign AI capabilities across allied nations.”
Oracle Corp (NYSE:ORCL) is a software application company that integrates Artificial Intelligence (AI) and Machine Learning (ML) across its entire technology stack—from high-performance cloud infrastructure to its enterprise software applications and database services—to provide built-in automation, enhanced analytics, and generative AI capabilities for businesses.
8. Innodata Inc. (NASDAQ:INOD)
Stock Upside Potential: 63.87%
Number of Hedge Fund Holders: 16
Innodata Inc. (NASDAQ:INOD) is one of the top stocks offering high upside potential in data centers and AI. On November 11, BWS Financial analyst Hamed Khorsand reiterated a Buy rating on Innodata Inc. (NASDAQ:INOD) with a $110 price target, citing better-than-expected Q3 results and strong future prospects. With a projected 26% revenue increase by 2026, Khorsand highlighted Innodata’s solid trajectory as the basis for his optimistic outlook.
Earlier on November 6, Innodata Inc. delivered another record-setting performance, with third-quarter revenue, profitability, and cash coming at all-time highs. Chief Executive Officer Jack Abuhoff reiterated that they expect the growth to continue, backed by deepening ties with big tech and AI innovation labs.
Revenue in the quarter totaled $62.6 million, driven by 20% year-over-year organic growth. For the first nine months of the year, revenue totaled $179.3 million, representing 61% organic growth. The company ultimately reported adjusted EBITDA of $16.2 million for the quarter, representing a 17% increase, as net income came in at $8.3 million, or $0.26 per share.
“Looking ahead, in 2026, we anticipate a continuation of our transformative growth, fueled by (1) deepening relationships with the world’s leading Big Tech and AI innovation labs, as evidenced by verbal confirmation of an expansion with our largest customer that could potentially result in substantial revenue, verbal confirmation of a deal with another Big Tech which could potentially result in $6.5 million of annualized revenue run rate [..],” said CEO Abuhoff.
Innodata Inc. (NASDAQ:INOD) is a global data engineering company that helps businesses solve complex data challenges and drive Artificial Intelligence (AI) and Generative AI innovation. It combines advanced machine learning and AI technologies with a global workforce of subject matter experts to provide high-quality data solutions.
7. IREN Limited (NASDAQ:IREN)
Stock Upside Potential: 76.76%
Number of Hedge Fund Holders: 39
IREN Limited (NASDAQ:IREN) is one of the top stocks offering high upside potential in the data center and AI sectors. On November 10, Canaccord Genuity raised its price target on IREN Limited (NASDAQ:IREN) to $70 from $42, while keeping a Buy rating. The upgrade came after the company signed a new deal with Microsoft to supply GPU services across its Horizons 1–4 data centers, a move analysts say adds meaningful long-term value.
Canaccord’s analysis valued the Microsoft GPU project at about $22 per share, using a discounted cash flow model with an 8% weighted average cost of capital. The firm also lifted its valuation of IREN Limited’s Sweetwater 1 site from $24 to $32 per share, citing higher peer valuations, though it noted the site still trades at a discount compared to data centers with co-location agreements. In total, the $28 price target increase reflects $22 from the Microsoft deal and $6 from the Sweetwater upgrade.
On November 6, IREN Limited reported fiscal Q1 2026 revenue of $240.3 million, up from $187.3 million in the prior quarter. Most of this came from Bitcoin mining ($232.9 million), while AI cloud services contributed $7.3 million. Despite record revenue, investor concerns linger over rising costs and earnings expectations. Looking ahead, the company is targeting an annualized run rate of $3.4 billion by the end of 2026, supported by plans to deploy 40,000 GPUs in Canada and expand its AI cloud offerings.
IREN Limited (NASDAQ:IREN) is a leading AI cloud service provider, delivering large-scale GPU clusters for AI training and inference. Its vertically integrated platform is built on a portfolio of grid-connected land and renewable-powered data centers across the U.S. and Canada, positioning the company to benefit from growing demand for AI and high-performance computing.
6. Applied Digital Corporation (NASDAQ:APLD)
Stock Upside Potential: 80.89%
Number of Hedge Fund Holders: 28
Applied Digital Corp (NASDAQ:APLD) is one of the top stocks offering high upside potential in the data center and AI sectors. On November 13, Northland Securities analyst Michael Grondahl reaffirmed his Buy rating on Applied Digital Corporation and assigned a $40 price target.
Earlier on November 4, Applied Digital Corp Corporation (NASDAQ:APLD) entered into a strategic partnership with Babcock & Wilcox. Under the terms of the agreement, B&W is tasked with delivering power for Applied Digital Corp (NASDAQ:APLD), an artificial intelligence factory valued at over $1.5 billion. B&W is to design and install the plant’s 300-megawatt natural gas-fired power plant, comprising proven boilers and associated steam turbines. The AI Factory is set to begin operations in 2028.
“We’re proud to partner with B&W, a company with nearly 160 years of proven leadership in power generation,” said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. “Their advanced boiler and steam turbine technology delivers efficiency on par with the simple-cycle gas turbines we evaluated – while enabling faster deployment. This partnership enhances our ability to add more capacity to current and future sites, giving Applied Digital a distinct speed-to-market advantage in bringing power generation online.”
Applied Digital Corp Corporation (NASDAQ:APLD) designs, develops, and operates digital infrastructure for high-performance computing (HPC) and artificial intelligence (AI). It provides AI cloud services through its Say Computing brand and builds and manages data centers to host HPC and AI workloads, including GPU computing and crypto-mining.
5. Nebius Group N.V. (NASDAQ:NBIS)
Stock Upside Potential: 87.83%
Number of Hedge Fund Holders: 45
Nebius Group N.V. (NASDAQ:NBIS) is one of the top stocks offering high upside potential in the data center and AI sectors. BWS Financial’s Hamed Khorsand reaffirmed a Buy rating on Nebius Group N.V. (NASDAQ:NBIS) on November 13, pointing to strong demand for Nebius Group’s AI cloud services and the company’s solid long-term position. Despite some operational hurdles that forced Nebius to scale back its short-term revenue forecast, the firm recently landed a major $3 billion deal with Meta, a sign of growing market confidence. Nebius could see a strong revenue lift by 2026, with the fourth quarter potentially reaching $2 billion if capacity grows as planned, a key reason supporting Khorsand’s continued upbeat outlook.
Previously, on November 5, Nebius Group N.V. announced a move to make it easier for vertical AI companies and digital enterprises to deploy and optimize open-source custom models at scale.
Consequently, the company unveiled Nebius Token Factory, built on its full-stack AI infrastructure to enable high-performance inference post-training and fine-grained access management. The platform supports major open-source models, including NVIDIA Nemotron, DeepSeek, and GPT-OSS by OpenAI, as well as Llama and Qwen.
Nebius Token Factory’s edge in enhancing the deployment and optimization of open-source models stems from its ability to combine the flexibility of open models. The platform is also optimized for efficiency, delivering sub-second latency even for heavy workloads.
“Every team has unique requirements, and they want speed, reliability and cost efficiency without heavy lifting,” said Roman Chernin, co-founder and Chief Business Officer of Nebius. “We built Nebius Token Factory not just to serve models, but to help customers solve real challenges and engineer for scale — optimizing inference pipelines and turning open models into production-ready systems.”
Nebius Group N.V. (NASDAQ:NBIS) is a technology company that builds full-stack cloud infrastructure for the global artificial intelligence (AI) industry.
4. CoreWeave, Inc. (NASDAQ:CRWV)
Stock Upside Potential: 88.95%
Number of Hedge Fund Holders: 29
CoreWeave, Inc. (NASDAQ:CRWV) is one of the top stocks offering high upside potential in the data center and AI sectors. On November 13, CoreWeave, Inc. (NASDAQ:CRWV) rolled out its Zero Egress Migration program, giving customers a way to move large datasets from other cloud providers without paying egress fees. The program works seamlessly with AWS, Google Cloud, IBM, Azure, and Alibaba, providing secure managed transfers and real‑time monitoring. This positions CoreWeave as a practical, cost‑effective option for handling AI workloads.
Earlier on November 12, H.C. Wainwright’s Kevin Dede reaffirmed a Buy rating on CoreWeave with a $180 price target, citing strong fundamentals and long-term potential. The company posted Q3 2025 revenue of $1.36 billion, up 13%, supported by $50 billion in performance obligations and a $55.6 billion backlog, reflecting robust demand from major clients like Meta and OpenAI.
CoreWeave has strengthened its competitive edge through strategic acquisitions, including OpenPipe, Weights & Biases, and Monolith AI, which expand its capabilities in reinforcement learning and applied machine learning. The renewal of its Platinum ClusterMAX rating further underscores the reliability of its AI infrastructure. Despite a minor guidance reduction that triggered a market overreaction, analysts remain confident in the company’s trajectory, supported by new partnerships with NASA and U.S. government agencies.
CoreWeave (NASDAQ:CRWV) is a hyperscale cloud and AI data center company specializing in GPU‑accelerated workloads for artificial intelligence, machine learning, and high‑performance computing.
3. DigitalBridge Group, Inc. (NYSE:DBRG)
Stock Upside Potential: 92.05%
Number of Hedge Fund Holders: 44
DigitalBridge Group Inc. (NYSE:DBRG) is one of the top stocks offering high upside potential in data centers and AI. On November 3, Keefe Bruyette raised its price target on DigitalBridge Group Inc. (NYSE:DBRG) to $12.50 while maintaining a Market Perform rating, following TD Cowen’s Michael Elias, who on October 31 reiterated a Buy and lifted his target to $20.00.
Elias cited DigitalBridge’s robust Q3 2025 results, record data center leasing, and strategic ownership of hyperscale assets that position the firm to benefit from surging AI-driven demand. With a strong pipeline, ongoing construction, and growing carried interest potential, analysts see DigitalBridge well-placed for sustained growth.
On October 30, the company delivered strong third-quarter results, characterized by a 22% year-over-year increase in fee revenue, which totaled $93.5 million. Distributable earnings were up 102% year over year to $21.7 million or $0.12 a share, exceeding analyst expectations of $0.01 per share. Fee-related earnings margin expanded to 40% in Q3 2025, from 34% as of last year’s same period the previous year, affirming improved operational efficiency.
The impressive third-quarter results come against the backdrop of continued execution across cross-strategic priorities. The company exited the quarter with $4.1 billion in capital formation, positioning it to surpass financial targets, including $40 billion in fee-earning equity under management. The company also reiterated its focus on digital infrastructure, particularly data centers, to support AI workloads. It has already secured 20.9 GW of power across its data center portfolio, with a record of 2.6+ GW.
“We exceeded our full year FEEUM target in 3Q one quarter early, reaching $40.7 billion while continuing to deliver substantial fee-related earnings growth and expanding margins, positioning DBRG to achieve and exceed our full year targets. The third quarter demonstrated the DigitalBridge investment thesis at scale. Over 2.6 gigawatts leased across our portfolio, a company record representing a third of the US hyperscale market, which validates that controlling a strategic 20+ GW power bank translates to market leadership in AI infrastructure deployments,” said CEO Marc Ganzi.
DigitalBridge Group, Inc. (NYSE:DBRG) is a global alternative asset manager that invests in and operates digital infrastructure, such as cell towers, data centers, and fiber networks. The company manages over $100 billion in assets and focuses on businesses essential for the growth of AI, 5G, and cloud computing.
2. Riot Platforms, Inc. (NASDAQ:RIOT)
Stock Upside Potential: 100.73%
Number of Hedge Fund Holders: 48
Riot Platforms Inc. (NASDAQ:RIOT) is one of the top stocks offering high upside potential in the data center and AI sectors. On November 3, Bernstein lifted its price target on Riot Platforms Inc. (NASDAQ:RIOT) to $25 from $19 while keeping an Outperform rating. The firm highlighted that U.S. Bitcoin miners are increasingly integral to the AI value chain by providing power-rich facilities for data centers. Bernstein noted miners are shifting focus from pure Bitcoin gains to optimizing power assets and adjusted its valuation approach, replacing its DCF model with multiples more suited to Bitcoin mining and AI/HPC colocation businesses.
Earlier on October 31, analysts at Needham reiterated a buy rating on Riot Platforms Inc. (NASDAQ: RIOT) and increased the price target to $28 from $19. The price target hike is in response to the company delivering solid third-quarter results with adjusted EBITDA of $197.2 million. The company also delivered record revenue of $180 million compared to $84.8 million delivered in the same quarter last year.
Chief executive officer Jason Les also reiterated that they are making significant progress on the development of the data center business. The developments are part of the company’s ongoing efforts to transform into a large, multi-faceted data center operator.
“This progress has culminated in announcing today the initiation of the core and shell development of the first two buildings at our Corsicana data center campus, representing 112 MW of total critical IT capacity. This development has been made possible by four key achievements this quarter, namely; (i) the acquisition of an additional 67-acre parcel of land directly adjacent to our original Corsicana site,” said CEO Les.
Riot Platforms, Inc. (NASDAQ:RIOT) is a financial services company shifting its business model from exclusively Bitcoin mining to building large-scale data centers that serve the AI and high-performance computing (HPC) industries. It leverages its existing large power capacity and infrastructure in high-demand regions to capitalize on the surging demand for AI infrastructure.
1. Bitfarms Ltd. (NASDAQ:BITF)
Stock Upside Potential: 132.56%
Number of Hedge Fund Holders: 10
Bitfarms Ltd. (NASDAQ:BITF) is one of the top stocks offering high upside potential in data centers and AI. On November 14, H.C. Wainwright cut its price target on Bitfarms Ltd. (NASDAQ: BITF) to $4.00 from $5.50, while keeping a Buy rating. Analysts linked the selloff to a broader pullback in AI-related investments and disappointment over the lack of financing deals for Bitfarms’ planned HPC/AI data center projects.
A day earlier, on November 13, 2025, Bitfarms reported weak third-quarter results. The company posted an EPS of -$0.08, far below the expected -0.02, marking a 300% negative surprise. Revenue came in at $69.25 million, missing forecasts of $88.72 million by nearly 22%, despite a 156% year-over-year increase from continuing operations. The poor earnings highlighted the challenges of Bitfarms’ pivot from Bitcoin mining to AI and HPC infrastructure.
Looking forward, H.C. Wainwright remains optimistic about Bitfarms’ long-term prospects. The firm expects HPC/AI monetization by the first half of 2027, supported by a 2 GW pipeline of sites in Pennsylvania and Washington. Bitfarms is also developing NVIDIA’s Vera Rubin GPUs and converting its Washington facility for AI workloads. While near-term guidance remains cautious, analysts believe the company could secure blue-chip HPC/AI contracts sooner, positioning it to benefit from rising demand for AI-driven data center capacity.
Bitfarms Ltd. (NASDAQ:BITF) is evolving beyond Bitcoin mining into a major force in AI and data centers, leveraging its 2.1 GW energy portfolio and robust infrastructure to support high-performance computing. With 12 advanced facilities offering 341 MW of capacity, the company is shifting toward AI-driven workloads and HPC operations, aiming to capture rising demand for AI computing power.
While we acknowledge the potential of Bitfarms Ltd. (NASDAQ:BITF) as an investment, 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 BITF and that has 100x upside potential, check out our report about the cheapest AI stock.
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