Since OpenAI released ChatGPT to the public, data center REITs and AI stocks have often appeared intertwined. More recently, data center REITs have begun trading less as a proxy for AI sentiment and more on their own merits, including:
- durable cash flows
- positive earnings surprises
- diversified portfolios
- greater pricing power
This shift may offer investors a way to participate in long-term AI growth while reducing concentration in a handful of mega-cap stocks, and may provide a cushion if enthusiasm for AI equities cools.
Active management can help balance opportunity and risk. We believe experienced managers are best positioned to evaluate opportunities, manage exposure, and integrate data center REITs within a diversified listed real estate portfolio. Read how.
Principal Asset Management
