3 Datacenter REITs Capitalizing on AI Boom: Which Real Estate Stocks Collect Big Tech Rent

Key Takeaways

• Iron Mountain (IRM), Equinix (EQIX) and Digital Realty (DLR) achieved total returns of 39% to 45% between April 2025 and April 2026, with Iron Mountain marking the top at 45.05%.
• Planned investments by major US hyperscalers (Microsoft, Alphabet, Amazon, Meta, Oracle) in datacenters and AI infrastructure are estimated at 700 to 725 billion USD in 2026 according to May 2026 analyses.
• Digital Realty signed the largest hyperscale deal in company history in the first quarter of 2026: a 200-megawatt AI inference lease for a datacenter.
• Datacenter REITs benefit from long-term lease agreements with terms of 5 to 15 years, which provide stable income streams independent of market fluctuations.
• Power supply constraints limit capacity expansion and provide existing datacenters with secured network connections a natural competitive advantage.
• The datacenter industry expects annual capacity growth of 15 to 25% (CAGR) in coming years according to Iron Mountain management.

Unprecedented Returns in the Shadow of Semiconductor Giants

While investors focus on Nvidia and other chipmakers, three datacenter REITs achieved extraordinary results between April 2025 and April 2026. Iron Mountain (IRM) led with a total return of 45.05%, followed by Equinix (EQIX) at 40.97% and Digital Realty (DLR) at 38.99%. This performance exceeded both the broader REIT sector and most growth equity indices at a time when traditional real estate struggled with rising interest rates.

The three companies represent different positioning in the datacenter market. Iron Mountain operates archiving and document management services alongside datacenters. Equinix specializes in colocation and interconnection services, where companies operate their own servers in shared infrastructure. Digital Realty positions itself as the world's largest datacenter platform with 733 datacenters in 39 major cities globally.

700 Billion USD Flowing into AI Infrastructure

Planned investments by major US hyperscalers – Microsoft, Alphabet, Amazon, Meta and Oracle – in datacenters and AI infrastructure were estimated at 700 to 725 billion USD for the current year in May 2026. Amazon alone committed in September 2026 to investing 200 billion USD in AI infrastructure expansion.

This unprecedented capital expenditure (CapEx) wave extends across a broad ecosystem: power generation, power grids, cooling technology, construction services and physical infrastructure. Only part flows to chipmakers. When building new AI datacenters, companies like Hochtief (concrete, steel, cables), Caterpillar (backup generators), Vertiv (cooling and power distribution), NextEra (power supply) and GE Vernova (turbine manufacturer) benefit.

Datacenter REITs collect another portion of this investment flood: they rent physical datacenter capacity, rack space, power supply and connectivity to hyperscalers and enterprise customers. Unlike construction companies or equipment providers, they generate recurring lease income over multi-year contracts.

Business Model: Real Estate with Technology Tailwinds

A datacenter REIT is a real estate investment trust that owns and operates physical datacenters. REITs (Real Estate Investment Trusts) are publicly traded entities that must distribute at least 90% of taxable income as dividends and in return pay no corporate income tax. Datacenter REITs combine this structure with demand for digital infrastructure.

Revenue comes from long-term lease agreements. Hyperscalers like AWS, Microsoft Azure and Google Cloud rent entire halls or individual racks for 5 to 15 years. They pay for square meters, power supply (measured in kilowatts), cooling and network connectivity. Tenants typically bear variable power costs, while the REIT provides infrastructure.

According to analyses from June 2025, hyperscalers increasingly partner with third-party developers and investors – including REITs – to expand capacity quickly and capital-efficiently. The reason: in-house construction ties up capital and management resources that tech companies prefer to invest in software and AI models.

Structural Competitive Advantages over Classical Real Estate

Datacenter REITs benefit from several structural advantages that distinguish them from office or retail REITs:

• Long-term leases with hyperscalers: Contract terms of 5 to 15 years secure income independent of short-term market fluctuations. Office REITs struggle with work-from-home trends and vacancies.
• Power supply constraints create market protection: Existing facilities with secured network connections develop natural competitive moats. New competitors must wait years for network connections or build expensive alternatives.
• Exponential demand from AI workloads: GPU-optimized infrastructure for generative AI models requires multiples of the computing power of traditional cloud applications. Since 2023, generative AI models have transformed datacenter capacity from a niche asset class to critical national infrastructure.
• Secular trend toward cloud computing: Unlike retail REITs (facing e-commerce competition), datacenter lessors benefit from the structural shift to cloud and machine learning.

Digital Realty: 1.9 Billion USD in Order Backlog

Digital Realty Trust operates what it claims is the world's largest datacenter platform. The company manages 733 datacenters in 39 major cities globally, with the PlatformDIGITAL platform comprising over 300 datacenters. Its customer base includes over 50% of Fortune 500 companies, hyperscalers, network carriers and enterprise AI users.

In the first quarter of 2026, Digital Realty generated 707 million USD annualized GAAP lease revenue (100% ownership interest). The company signed its largest hyperscale deal in company history in that quarter: a 200-megawatt AI inference lease. For comparison: a typical datacenter consumes 5 to 30 megawatts; GPU-optimized AI facilities require multiples of that.

In the second quarter of 2026, the order backlog grew to 1.9 billion USD (100% ownership interest) or 1.4 billion USD (Digital Realty's share after joint venture adjustments). The backlog equals approximately 30% of annualized datacenter revenue – projects already leased but not yet completed. Development focus areas include Northern Virginia, Charlotte, Atlanta, São Paulo and Marseille.

Growth Outlook: 15 to 25% Annually

The datacenter industry expects annual capacity growth of 15 to 25% (CAGR) according to Iron Mountain management in September 2026. This outlook is supported by leasing activity from all three top REITs: hyperscalers are signing multi-year lease agreements at unprecedented pace.

Growth drivers extend beyond generative AI. Cloud computing, 5G demand and digital services create structural demand. AI advances since 2023 further accelerated expansion: GPU clusters for production workloads require massive physical infrastructure built in months – not years.

Risks: Energy, Regulation and Hyperscaler Competition

Despite structural advantages, risks exist. Power supply is both a growth driver and the biggest challenge. Rising energy costs burden operating margins if REITs cannot fully pass them to tenants. Power constraints limit physical expansion: without secured network connections, land remains unused.

Regulatory intervention is intensifying. Authorities are examining the massive power consumption of AI datacenters in the context of climate goals. Compliance requirements could increase capital costs and extend approval processes.

Hyperscalers increasingly operate their own infrastructure. Microsoft, Amazon and Google build proprietary datacenters to maintain control over latency, security and capacity. If tech companies reduce third-party demand, datacenter REITs would lose growth momentum. At the same time, capital efficiency and speed favor external partners: the 700 to 725 billion USD in hyperscaler CapEx for 2026 exceeds the capacity of individual companies to build internally.

Supply chain constraints limit capacity expansion through physical and logistical constraints. Specialized cooling and power distribution components have lead times of months. High demand outpaces supply of qualified construction companies and electricians in the short term.

Classification for DACH Investors

Datacenter REITs offer retail investors access to digital infrastructure without investing directly in individual hyperscalers or volatile chipmakers. The combination of real estate stability (long-term leases) and technology tailwinds (AI demand) differs from classical real estate investments.

The 39% to 45% returns in the past year are not a guarantee of future performance. Most of these gains resulted from revaluation: investors recognized the strategic value of datacenter capacity in the AI era. Whether this performance repeats depends on whether hyperscaler investments remain at the projected 700 billion USD annually – and whether REITs convert this demand into lease agreements.

For Swiss investors: the three REITs are listed on US exchanges (NYSE: IRM, EQIX, DLR) and face currency risk against the franc. Dividends are paid in USD and taxed as income in Switzerland. REITs offer tax benefits in the US (no corporate income tax), but this structure provides limited benefit for DACH investors.

In the context of current market conditions – the S&P 500 stood at 7,713 points on September 4, 2026 (–0.42%), the NASDAQ Composite at 26,507 points (–0.29%) – datacenter REITs emerge as a defensive position in the technology sector: they benefit from tech investments without carrying the valuation multiples of software or chip stocks.