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The history of capital markets gives us plenty of examples where a megatrend has lifted the stocks of companies that are not only at the front and center of the action, but also the ancillary industries. To use the “Gold Rush” example, semiconductors like the ones designed by Nvidia (NVDA) might be the proverbial “picks and shovels” of the artificial intelligence (AI) juggernaut - but as it turns out, all of those massive, high-powered chips aren't just hanging around, gathering dust in basement storage at Big Tech companies.
Instead, they're housed in massive, specialized data centers, one of the AI-adjacent niche industries that's turning into a virtual boom town for investors. While AI is forecasted to add a staggering $15.7 trillion to the global economy by 2030, data centers should be a key beneficiary of that growth. According to real estate consultancy firm JLL, as the demand for AI multiplies in the coming years, data center storage capacity is expected to grow from 10.1 zettabytes (ZB) in 2023 to 21.0 ZB in 2027, for a five-year compound annual growth rate of 18.5%. Adding to the optimism around data centers, this report forecasts an additional 120-130 hyperscale data centers will come online each year over the next decade.
