What’s the best data center stock play right now for investors?
We asked Seeking Alpha analysts Michael Del Monte, Julian Lin, and The J Thesis for their picks.
Michael Del Monte: Broadcom (AVGO) is an appealing data center strategy given its broad reach across custom silicon, networking, and interconnect. AVGO’s partnership with Alphabet (GOOG) (GOOGL) may drive substantial growth, particularly as AI developers lean into leveraging its TPUs for model development. Intel (INTC) is also an appealing data center strategy given its announced partnership with Nvidia (NVDA) for developing a series of custom CPU chips to integrate directly into NVLink.
In terms of IT infrastructure, Hewlett Packard Enterprise (HPE) presents an appealing case for sovereign data center development with HPE GreenLake Cloud, a private cloud offering that leverages HPE’s infrastructure and networking solutions. HPE’s recent acquisition of Juniper provides a full-stack data solution that may enhance its opportunity with sovereign data center development.
For a differentiated data center strategy, investors may consider Nucor (NUE) and Sanmina (SANM). SANM recently acquired the manufacturing component of ZT Systems from Advanced Micro Devices (AMD) while securing a partnership for providing rack-scale solutions for AMD’s next-generation chips. NUE entered the data center server rack and cabinet solutions business nearly two years ago through the acquisition of Southwest Data Products, expanding its offerings for data center development beyond structural steel.
For associated infrastructure, I believe components for power distribution will be a big winner in the space, such as Hubbell (HUBB).
Julian Lin: Nvidia (NVDA) is my top AI data center pick. It definitely is one of the more obvious names, but I’ve learned not to discriminate based on that.
NVDA management has indicated that the shift to agentic AI represents yet another leg up in growth. The valuation looks quite reasonable given the disconnect between the stock price performance and the underlying growth over the last year. The company has shown an uncanny ability to surprise to the upside, and I expect the good times to roll.
The J Thesis: I think Nebius (NBIS) may be the best AI data center play at the moment. The industry pioneer is exposed to explosive demand, supported by more than $3 billion in contracts from leading hyperscale companies such as Microsoft (MSFT), Meta (META), and Uber (UBER).
The company is rapidly scaling with a projected 900 MW in connected power by FY2026. Last quarter, management indicated that all available capacity had been sold out, representing strong momentum in demand. The core AI infrastructure revenue surged at a triple-digit rate, alongside improving margins and fundamentals. This argues for excellent execution and consistency in performance, which remains crucial in pioneering the AI revolution.
One could argue that it’s not worth overcomplicating; thus, focus on going forward with Nvidia (NVDA), but that trade has a concentration risk. I also like CoreWeave (CRWV), but it comes with execution and backlog conversion risks, and based on the recent supply delay, investor confidence may be suppressed in the short term.
Nebius (NBIS) is positioning itself to dominate the AI HPC space over the following quarters. At the current price tag, NBIS appears to be cheap, and if 500% forward revenue growth materializes over the next 12 to 15 months, it may be one of the most compelling AI data center plays you may consider today.