Key Points:
- Data center demand currently beats supply due to the artificial intelligence boom.
- Bernstein expects global data center demand to grow by 13 percent yearly.
- Analysts picked Digital Realty as their top choice for enterprise growth.
- Equinix earned a positive rating for its steady expansion strategy.
The explosion of artificial intelligence creates a massive need for data centers. Right now, companies cannot build these specialized facilities fast enough to satisfy surging demand. This shortage creates a perfect opportunity for businesses that own and operate internet infrastructure.
Financial analysts at Bernstein recently started covering this booming sector. They note investors have pledged over one trillion dollars to build physical infrastructure for cloud computing. Because customer demand outpaces new construction, facility prices will remain high.
The brokerage firm shared specific market predictions. Bernstein expects global data center demand to expand by 13 percent every year until 2028. They forecast that empty space in these facilities will hit a rock-bottom low of under five percent in 2026. This vacancy rate should climb past ten percent by 2028 as new projects finally open.
When picking stocks, Bernstein favors companies that serve corporate clients instead of giant cloud providers. They named Digital Realty as their top pick. Analysts believe Digital Realty will capture strong enterprise growth while competitors chase hyperscale contracts. They also gave Equinix a positive rating, praising its careful expansion strategy.
The analysts felt much more cautious about CoreWeave, giving the newer cloud company a negative rating. Bernstein warned that major cloud providers might soon stop acting as partners and become direct competitors. This shift could squeeze CoreWeave’s profit margins, hurt cash flow, and slow growth significantly by 2027.
Finally, Bernstein started covering Crown Castle, a company operating telecommunication towers. They gave this stock an optimistic rating, expressing confidence in the company’s recent efforts to turn its business around and boost revenue.
