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Three Hot REITs for the AI Data Center Boom
Artificial intelligence is no longer a “future trend.” It is a present-day infrastructure race, one that requires enormous amounts of compute, storage, networking, electricity, and cooling. And behind all of it sits a simple, often overlooked bottleneck: physical data center capacity.
To put the scale in context, there are roughly 3,000 data centers across the United States. Meanwhile, McKinsey estimates that $5.2 trillion of investment into AI infrastructure could be needed by 2030. Just as important, McKinsey’s analysis suggests demand for AI-ready data center capacity could rise at an average 33% annually from 2023 to 2030, ba growth rate that implies persistent, compounding pressure on supply.
That demand is already showing up in corporate spending plans.
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Alphabet (Google) has raised its 2025 capital spending outlook to roughly $91–$93 billion.
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Microsoft has discussed materially higher capex, with spending up sharply in pursuit of AI and cloud capacity.
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Amazon has said it expects 2025 capex around $125 billion, reflecting the sheer scale of infrastructure being built.
Analysts at UBS, cited by S&P Global, also expect AI-related capex to keep expanding, reaching about $571 billion in 2026 and $1.3 trillion by 2030.
Why data centers may be a durable AI tailwind
AI workloads are different from prior waves of computing. Training and running large models can require far higher power density per rack, new cooling strategies, and more sophisticated networking. This is one reason the “data center problem” is not solved simply by buying more chips - space, power delivery, and mechanical systems must scale in parallel.
In practical terms, that creates three dynamics that often benefit owners of data center real estate:
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Long-duration demand: Cloud and AI infrastructure is increasingly “always on,” not cyclical in the way many enterprise IT budgets used to be.
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Scarcity value (power and location): The best markets are often power-constrained, and permitting/transmission timelines can be long.
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Contracted cash flows: Many operators lease capacity under multi-year arrangements, helping support dividends.
For investors, this is where select REITs, and one targeted ETF, come into focus.
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Company: Digital Realty Trust (SYM: DLR)
What it is: Digital Realty is one of the largest global owners and operators of data centers, offering colocation and interconnection solutions across major markets.
Why it matters for AI: AI demand is driving both hyperscaler expansion and enterprise adoption, and Digital Realty has been building capacity positioned for those customers. In its third quarter 2025 results, the company reported revenue of about $1.6 billion (up roughly 10% year over year) and Core FFO of $1.89 per share. Management highlighted a substantial backlog and visibility into 2026.
Just as notable, Digital Realty raised its outlook for 2025: it increased Core FFO per share guidance to $7.32–$7.38 and constant-currency Core FFO to $7.25–$7.30, and lifted expected total revenue to $6.025–$6.075 billion.
Income angle: Digital Realty’s dividend yield has recently been in the low-3% range (market-dependent).
What to watch: Tenant concentration, cost of capital (rates), and development execution. Data center REITs can be capital-intensive; the upside is that strong leasing and backlog can translate into growing cash flows over time.
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Company: Iron Mountain (SYM: IRM)
What it is: Iron Mountain is best known for physical records storage, but it has been steadily transforming into a broader information management and infrastructure REIT with a rapidly growing data center business.
Why it matters for AI: AI adoption is increasing demand not only for compute, but also for data storage, governance, and lifecycle management. Iron Mountain’s Q3 2025 results underscore momentum in its “growth businesses.” The company reported record quarterly revenue of $1.8 billion (up 12.6% year over year) and noted that data center, digital, and asset lifecycle management collectively grew more than 30% year over year. It also reported record quarterly AFFO of $1.32 per share.
Income angle: Iron Mountain increased its quarterly dividend to $0.864 per share, payable January 6, 2026 to shareholders of record December 15, 2025. Its dividend yield has recently been around the low-4% range, depending on price.
What to watch: IRM is a transformation story. The market will continue to focus on execution in data centers (leasing, utilization, buildout returns) and how effectively the company balances growth capex with dividend coverage.
ETF: Pacer Benchmark Data & Infrastructure Real Estate ETF (SYM: SRVR)
What it is: If you prefer diversification over single-stock exposure, SRVR is an ETF designed to provide targeted access to companies tied to data and infrastructure real estate (including data centers and connectivity-oriented real estate).
Why it matters for AI: Instead of betting on one operator, SRVR spreads exposure across a basket that typically includes data center REITs and related infrastructure names. The fund’s total expenses are 0.49%.
Income angle: Distributions vary, but the sponsor’s 2025 distribution schedule shows a payable date of January 5, 2026 for the year-end cycle (with ex/record date December 30, 2025). As always with ETFs, distribution amounts can fluctuate meaningfully quarter to quarter.
What to watch: ETF performance will be driven by the underlying sector—particularly interest rates (REIT sensitivity), data center leasing fundamentals, and equity market risk appetite. The diversification helps reduce company-specific risk, but it will not eliminate sector drawdowns.
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