AI data centers have shifted from quiet infrastructure projects to headline news, with politicians and communities now questioning their power use, water needs, and tax breaks ahead of the 2026 U.S. midterms. That tension can reshape risks and returns for data center REITs exposed to this buildout. This article unpacks the policy story and examines three stocks closely tied to these debates.
The three U.S. data center REITs in this article are just a starting sample. The full screen surfaced 9 more companies with equally detailed stories around policy exposure, tenant mix, and AI related demand that are not covered here. To go deeper, use the U.S. Data Center REITs screener to identify, filter, and analyze the data center REITs that best match your own return and risk preferences.
Equinix (EQIX)
Overview: Equinix is a global data center REIT that owns and operates colocation facilities where enterprises, cloud providers, and AI players place their servers and connect to each other for low latency and high reliability. Its platform is used to route traffic between clouds, customers, and partners, giving investors direct exposure to the digital infrastructure behind AI and cloud workloads.
Operations: Equinix generates about US$9.9b in revenue from designing, building, and operating its IBX data centers, with income spread across the U.S., EMEA, Asia Pacific, and the rest of the Americas.
Market Cap: US$107.1b
For investors focused on AI and cloud driven infrastructure, Equinix offers a large, diversified data center footprint that already supports high density and liquid cooled deployments, plus interconnection services that can lift margins and stickiness. Recent earnings and guidance updates show interest in AI training and private AI workloads, while partnerships like the NVIDIA DGX private cloud at Equinix highlight its role as a meeting point between enterprises and hyperscalers. At the same time, heavy capex needs, high leverage and political scrutiny of data center power use and grid impacts add execution and regulatory risk. That mix of scale, AI exposure and funding pressure makes Equinix a REIT some investors may want to examine more closely.
Equinix is becoming a key meeting point for AI training and private AI workloads, yet few investors fully connect its global interconnection platform with the political scrutiny around power and capex that could reshape returns. Get the 4 key rewards and 2 important warning signs
Build your own AI data center shortlist
Equinix and the two other data center REITs in this article are examples of what comes out of a focused screen, but the real value is in shaping your own filters around valuation, growth, financial health, and risk. Use our flexible Screener to set those rules for yourself, or start with one of our curated Investing Ideas.
Digital Realty Trust (DLR)
Overview: Digital Realty Trust is a data center focused REIT that owns and leases large scale facilities where cloud providers, hyperscalers, and enterprises house their servers and connect to networks. For investors using the U.S. Data Center REITs screener, it offers exposure to mission critical colocation and hyperscale infrastructure that underpins AI and cloud workloads.
Operations: Digital Realty Trust generates about US$6.8b in revenue from its commercial data center REIT activities, with roughly US$3.6b from the United States and US$3.2b from markets outside the U.S.
Market Cap: US$73.6b
Digital Realty Trust provides a direct way to gain exposure to the build out of AI and cloud infrastructure, supported by record leasing, a US$1.9b backlog of signed but not yet started contracts, and active expansion in U.S. hubs such as Northern Virginia and Kansas City. At the same time, it relies heavily on external debt funding and its profit margin recently moved down from 23.6% to 11.2%, so the company needs to balance growth with interest costs and development risk. With bipartisan pushback on data center power use rising, management’s focus on grid partnerships and water efficient operations is also a key consideration. For investors who want exposure to hyperscale demand and are willing to scrutinize leverage and local policy risk, Digital Realty Trust may merit closer research.
Digital Realty Trust is reporting record leasing and a US$1.9b backlog, yet many investors may not see the full picture behind that growth and the funding risk beneath it. Get the 3 key rewards and 2 important warning signs (1 is major!)
Fermi (FRMI)
Overview: Fermi develops private electric grids that deliver highly redundant gigawatt scale power behind the meter to AI focused data centers and advanced computing campuses, making it an energy partner for hyperscalers rather than a traditional colocation REIT. Its flagship Project Matador in Texas aims to combine natural gas, nuclear, solar, batteries, and grid power into one of the largest dedicated power platforms for AI workloads in the U.S.
Market Cap: US$3.7b
Fermi gives you direct exposure to one of the tightest bottlenecks in AI data centers: reliable gigawatt scale power at a time when many states are pushing developers to fund their own grid upgrades and accept tougher permitting. The company is still pre revenue and reported losses, relies on external borrowing, and needs large tenants and project financing to support more than US$3b of planned capital at Project Matador, so execution and funding risk are significant. Binding agreements such as the 15 year TensorWave lease for 222 MW with expansion potential and the Hillcore alliance to build 2.6 GW of on site generation indicate interest from AI tenants and capital providers. For investors willing to accept early stage REIT style risk in return for exposure to the power side of AI infrastructure build outs, the full Fermi story may warrant closer study later in this article.
Fermi’s early stage giga scale power vision attracts AI demand, yet the real story lies in how its funding and tenant pipeline fit together. Read the full narrative for Fermi
Seeking Alternatives Before The Crowd
Fresh stock ideas can move from quiet to flying quickly. Use your curiosity now, before the crowd catches them and the data goes stale. Get in early.
- Spot potential high yield anchors for your portfolio by scanning our curated 12 dividend fortresses while they are still under the radar for now, and consider these opportunities before yields change.
- Review the hand picked 55 AI infrastructure stocks to explore companies that could benefit from surging compute demand while this theme remains in focus, and evaluate them in a timely way.
- Assess the focused 39 power grid technology and infrastructure stocks to explore opportunities related to grid upgrades while valuations may not yet fully reflect this theme, and review them before others react.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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