2 Data Center Stocks That Could Help Make You a Fortune
Key Points
Morgan Stanley projects capex at the five largest U.S. tech companies to reach $1.4 trillion in 2028.
Iren has the assets to become a leading AI cloud provider, with analysts projecting a massive jump in profitability in three years.
Vertiv sees revenue growing at least 20% annually through 2030, with analysts expecting 38% annualized earnings growth.
- 10 stocks we like better than Iren ›
Some of the largest tech companies are investing heavily in building data centers to meet the insatiable demand for artificial intelligence (AI) services. Morgan Stanley expects capital spending by the top hyperscalers to reach $1.4 trillion by 2028.
Investors can still find attractively valued stocks that could soar over the next several years. Two data center stocks that appear reasonably priced relative to their growth potential are Iren (NASDAQ: IREN) and Vertiv (NYSE: VRT).
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1. Iren: A vertically integrated AI cloud
Shares of Iren have surged more than 1,000% over the past three years, and it's not hard to see the stock continuing to push to new highs. Iren is building an artificial intelligence (AI) cloud platform from the ground up: It owns the land, controls the power, and uses in-house construction and engineering teams to build its facilities. These assets are hard to replicate. Iren also recently completed the acquisition of Mirantis, adding software capabilities to complement its data center hardware.
Iren isn't just building data centers. The Mirantis deal shows Iren is positioning to become a leading AI cloud infrastructure provider over the long term -- and that ambition still isn't reflected in the stock's $19 billion market value.
The company is currently at $1 billion in annualized revenue, with management guiding to $4 billion by the end of 2026. Contract pricing for capacity is also moving higher. Recent three-year contracts have cleared more than $20 million of revenue per IT megawatt, with current discussions pointing to $25 million per megawatt.
Iren has a pipeline of more than 5 gigawatts, which translates into tens of billions in long-term revenue potential. It just delivered the first of four 50-megawatt liquid-cooled units to Microsoft as part of a previously announced five-year, $9.7 billion deal from October 2025. The next deployments are expected in the fourth quarter of 2026.
That first delivery validates Iren's ability to execute complex projects -- a must-have capability in today's market. It also reinforces the strength of Iren's vertically integrated approach, which could help it build faster, hit timelines, and win more large-scale contracts.
Wall Street analysts expect adjusted operating profit to reach $10.7 billion by fiscal 2029. Against an enterprise value (market cap plus net debt) of about $19 billion, the stock looks cheap. Investors who are able to hold through near-term volatility could be rewarded.
2. Vertiv: A leader in power management and cooling
Vertiv helps data centers manage power usage and keep chips running efficiently with advanced cooling systems, including liquid cooling. The company's revenue growth has strengthened over the past three years, pushing the stock up 596%.
As server racks draw more power and generate more heat, Vertiv can sell more equipment to each data center. Over time, that can translate into higher revenue per build-out -- and stronger margins as demand shifts toward more complex, higher-value systems.
In the recent quarter, revenue grew 24% year over year, with adjusted operating profit margin above 22%. Management is seeing a strong data center market that's expanding geographically, with smaller frontier AI labs maturing into larger customers with bigger spending budgets. These trends support Vertiv's growth outlook.
That backdrop is why management now guides for long-term annualized revenue growth of 20% to 22% through 2030, up from its prior 12% to 14% outlook. It also expects adjusted operating margin to improve to at least 27%, which would drive faster earnings growth.
Management's confidence reflects broad demand -- from individual products like switchgear to full-system designs through offerings like OneCore and SmartRun. That end-to-end footprint can deepen customer relationships and increase long-term stickiness.
Wall Street expects long-term earnings growth of 38% annually. If that plays out, investors could see strong returns even with the stock trading at around a forward price-to-earnings multiple of 37.
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John Ballard has positions in Iren. The Motley Fool has positions in and recommends Microsoft and Vertiv. The Motley Fool has a disclosure policy.
