Data center REIT stocks are finding an unexpected ally in the community resistance that has made life harder for Big Tech: the very protests slowing new construction may be driving up the value of what already exists.
A recent NBC News poll found that 69% of respondents oppose AI data centre construction in their area. State legislatures are moving to codify that sentiment, and a moratorium on new data centre development is already in place in New York. The political temperature is set to rise further heading into the midterm elections.
The scale of what is at stake makes the supply constraint consequential. PwC’s Global Data Centre Outlook, commissioned with Oxford Economics across 46 countries, puts cumulative global capital expenditure on AI compute infrastructure at $31.6 trillion through 2050, with a plausible upside of nearly $50 trillion if AI adoption accelerates faster than projected. Annual data centre spending is forecast to rise from roughly $800 billion in 2026 to $1.8 trillion by 2050. PwC identifies power availability, not land, as the decisive factor shaping where that investment ultimately flows.
Separately, PwC’s Global Infrastructure Outlook projects that annual investment in data centre buildings alone will more than double from $113.8 billion in 2024 to $251.8 billion in 2027, with total building-construction capex exceeding $1.5 trillion between 2024 and 2032. That is the construction market the REITs sit inside, and where a supply squeeze would bite first.
Hyperscalers are expected to spend more than $5 trillion on AI data centres by 2030, according to Goldman Sachs Research cited by CNBC. At present there are more than 4,700 data centres across the United States, a number expected to grow sharply. Yet the public REITs collectively own only around 275 of those facilities, accounting for less than 10% of owner-operated and leased capacity in the country, according to the National Association of Real Estate Investment Trusts (Nareit). Data centre REITs represent 13% of the total US REIT market capitalisation of $1.5 trillion.
Why Data Center REIT Stocks Hold the Pricing Advantage
Vikram Malhotra, a Mizuho analyst, set out the core bull case in a 1 September note. ‘Amid political and community push-back, while new projects could see delay, it could be a positive for existing projects/DC [data center] REITs which have pricing power driven by continuously expanding compute demand,’ he wrote.
Amanda Martinez, an analyst at Wells Fargo Investment Institute, offered a more measured reading. The supply and demand dynamic does favour existing capacity holders, she said, but permitting restrictions and moratoriums could also slow development timelines and push up costs for operators trying to expand. ‘On the other hand, permitting restrictions and moratoriums could weigh on future growth by slowing development timelines and pushing up costs,’ she said.
Three REITs sit inside the FTSE Nareit Equity REITs Index: Equinix, Digital Realty Trust and Iron Mountain.
Equinix is the largest of the three, with a market capitalisation of roughly $102 billion. It carries a 1.99% dividend yield and has risen approximately 37% year to date. The company recently signed a deal with Nvidia. Digital Realty Trust, with a market cap of $71 billion, yields 2.59% and is up more than 23% in 2026. Iron Mountain, the smallest of the group, has a market cap of $34.7 billion, a 2.96% dividend yield and has climbed 42% so far this year.
All three raised full-year guidance after second-quarter results that beat analyst expectations on adjusted funds from operations. Digital Realty’s Q2 2026 earnings release showed diluted AFFO per share of $2.47, up from $1.68 in Q2 2025. The diluted AFFO payout ratio fell to 49.5% from 72.8% in the prior-year quarter, and dividends per share were $1.22 for Q2 2026. Full-year Core FFO per share guidance (excluding net promote) was set at $7.90 to $8.00.
Scale and Land Banks as a Competitive Moat
David Guarino, an analyst at real estate analytics firm Green Street, is bullish on both Equinix and Digital Realty on the supply-constraint thesis. ‘Their size allows them to be nimble,’ he said. ‘So if there is restriction or pushback in a certain market, they’ve got big land banks and big development pipelines, where they can pivot to other markets, and thus far, it has not slowed down their growth story in any way.’
Guarino prefers Equinix of the two. As AI inference workloads, which require lower latency and proximity to population centres, begin to accelerate, he argued that Equinix’s business mix positions it better than Digital Realty’s. ‘That’s a lot more of Equinix’s business than Digital Realty’s business,’ he said.
Alex Pettee, president and director of research and ETFs at Hoya Capital Real Estate, which holds both names in its model portfolios, offered a blunt summary of how the data center REIT stocks stand relative to broader AI equities. ‘You’re getting double-digit earnings growth, tangible real estate and infrastructure, recurring contractual revenue, and a roughly 2%-3% dividend yield,’ he said. On valuation, he acknowledged the group is not cheap compared to other REITs but argued they look attractive against the rest of the AI trade.
The binary for investors is straightforward: if zoning tightens and power connections become harder to secure, the facilities already consented and connected become worth more. The next test arrives when state legislatures reconvene and the midterm campaign trail brings data centre siting back into the political spotlight.
