BMO Names Top Data Center Stocks Amid Regulatory Risks

BMO Capital Markets identified Digital Realty Trust, Equinix, and Csquare as the best-positioned data center stocks to navigate increasing development risks. Analysts Ari Klein and John P. Kim warned that recent election results in key states have raised the probability of project delays and potential moratoriums.

Despite these regulatory headwinds, BMO expects strong AI demand and vacancy rates below 1% to support pricing for existing operators. The firm highlighted different strategic advantages for each recommended company. Digital Realty Trust is positioned for pricing gains due to its large land bank and 1.5GW of capacity currently under construction.

Equinix is noted for its distributed global platform across 20 countries, which limits its exposure to risks associated with any single project. Csquare is viewed as largely immune to development delays because it focuses on brownfield expansion at existing sites rather than new greenfield development.