Core News Highlights
The artificial intelligence market is projected to grow rapidly, with Fortune Business Insights estimating a compound annual growth rate (CAGR) of 29.1% from 2025 to 2032. In response to increasing demand, data center operators like Nvidia, Equinix, and Digital Realty are expanding their infrastructures to accommodate AI technology.
Nvidia dominates the discrete GPU market with over 90% share as it shifts focus from gaming to data centers, forecasting revenue growth of 47% and earnings per share growth of 45% from fiscal 2025 to fiscal 2028. Meanwhile, Equinix operates over 270 data centers and Digital Realty over 300, providing essential infrastructure for cloud and AI companies.
Both data center REITs have faced challenges due to rising interest rates but are expected to regain attractiveness as rates decline. Equinix trades at 21 times projected adjusted funds from operations (AFFO) per share for 2025 with a forward yield of 2.4%, while Digital Realty also trades at the same multiple but offers a higher forward yield of 3.1%.
