Data Centers Fuel AI's Future: Key Investment Opportunities

Major technology firms are significantly increasing their investment in data centers to support the escalating demand for artificial intelligence (AI) services. Projections indicate that capital spending by leading hyperscalers could amount to $1.4 trillion by the year 2028, highlighting the immense growth in this sector.

Investors looking to capitalize on AI's continued expansion can consider two data center stocks: Iren and Vertiv. Iren, a vertically integrated AI cloud provider, has experienced over 1,000% growth in three years. The company's acquisition of Mirantis enhances its software capabilities, complementing its hardware infrastructure.

Iren anticipates reaching $4 billion in annualized revenue by the end of 2026, with current contracts for capacity generating over $20 million per IT megawatt. A substantial five-year deal with Microsoft for liquid-cooled units, starting in October 2025, underscores Iren's execution capabilities.

Vertiv, a key player in power management and cooling solutions for data centers, has seen its stock rise 596% in three years. The company benefits from increased demand for efficient cooling and power distribution as servers become more powerful and heat-generating.

Vertiv has raised its long-term annualized revenue growth forecast to 20%-22% through 2030, with an expected increase in adjusted operating margin to at least 27%. Analysts predict long-term earnings growth of 38% annually for Vertiv, signaling strong potential returns for investors.