Key Takeaways
- AI infrastructure demand is accelerating, creating long-term opportunities for companies that provide power, cooling, and compute capacity for data centers.
- Applied Digital, IREN, and Vertiv each offer unique advantages such as speed-to-deploy data centers, vertically integrated renewable power, and advanced liquid-cooling systems.
- Despite recent volatility, analysts remain bullish on all three companies, as hyperscalers sign major AI cloud contracts and invest heavily in next-generation data center capacity.
The evolution of artificial intelligence (AI) is tied to physical infrastructure. Every breakthrough in AI models, training speeds, and inference workloads requires massive amounts of power, cooling, and compute capacity.
That’s why some of the most compelling technology stocks in the next phase of the AI boom aren’t traditional “AI stocks” at all, but the companies building and supplying the next-generation data-center ecosystem.
And despite recent volatility, demand for AI infrastructure shows no signs of slowing. Hyperscalers continue to sign long-term contracts, utilities are racing to secure new power capacity, and data-center operators are scrambling to expand as quickly as possible. Investors who can look past the noise may find attractive entry points in select companies positioned at the center of this build-out.
Here are three stocks that provide essential services and could benefit as AI becomes a larger part of the global economy.
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Why Applied Digital Is Becoming a Go-To Partner for AI Compute
Applied Digital (NASDAQ: APLD) is shaping up to be one of the more intriguing pure-play operators in the emerging AI data-center landscape. The company began as a high-performance computing host but has pivoted aggressively into AI cloud infrastructure, and demand is quickly catching up to its strategy.
APLD has secured multiple long-term AI hosting agreements, providing it with significantly more revenue visibility than most small-cap data center operators.
The company builds modular, energy-efficient data centers in power-rich regions, boasting accelerated deployment timelines compared to its competitors.
That speed-to-market matters—hyperscalers are racing to secure compute capacity, and APLD has positioned itself as an agile, lower-cost partner.
Another bullish element is margin expansion. As the company shifts more of its footprint from crypto-related hosting to higher-value AI workloads, its revenue per megawatt and overall profitability are improving. Recent contract wins show that APLD is gaining credibility with enterprise-level customers, a key validation point for its long-term model.
Plus, the company recently announced the successful and on-time Ready for Service (RFS) for the second phase of its Polaris Forge 1 AI factory campus in North Dakota. This is the first of three contracted buildings at this campus to operate at its full 100 megawatt critical IT load. APLD stock jumped over 10% following that news, but it’s still down 30% in the 30 days ending Nov. 24, which reflects the volatility in this sector.
How IREN’s Vertical Integration Creates an Edge in AI Compute
IREN Limited (NASDAQ: IREN) has successfully pivoted from being solely focused on Bitcoin mining into a renewable energy-powered data center operator. The company provides high-performance AI cloud computing space and power that hyperscalers need.
In early November, the company announced it had secured a $9.7 billion AI cloud contract with Microsoft Corp. (NASDAQ: MSFT) of which IREN will receive a 20% prepayment.
Under the terms of the agreement, IREN will provide Microsoft with NVIDIA Corp. (NASDAQ: NVDA) GPUs that it will purchase from Dell Technologies Inc. (NYSE: DELL).
Some investors question the circular nature of the deal and IREN’s continued exposure to Bitcoin.
However, its dual-revenue model—generating income from both AI and Bitcoin—offers risk mitigation if one segment slows. That said, IREN stock remains sensitive to Bitcoin price movements. Shares are down 23% over the past 30 days due to crypto volatility.
If Bitcoin continues to fall, IREN will likely drop in sympathy. On the other hand, if Bitcoin has another strong rally, as it’s been prone to do, you can expect IREN to climb as well. Analysts have been raising their price targets on IREN stock, and they now sit around $70, or 47% upside.
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Vertiv’s Liquid-Cooling Technology Is a Quiet AI Winner
Vertiv (NYSE: VRT) is a company that provides power, cooling, and thermal management systems that data centers need. Like IREN, VRT stock has declined about 8% over the last 30 days due to broader concerns about the AI data center trade.
AI compute workloads generated enormous heat. Traditional cooling systems can't keep up—but Vertiv specializes in liquid-cooling solutions that are 3,000 times more efficient than conventional systems.
Analysts forecast that this technology will grow at a 20% compound annual growth rate (CAGR) through 2030.
That’s the bull case for Vertiv. It’s also one reason why analysts are raising their price targets on VRT stock, which trades about 4.9% below its consensus price target of $177.81.
Perhaps more importantly, analysts are forecasting Vertiv to increase its earnings by over 24% in the next 12 months, which makes a valuation of around 47x forward earnings seem reasonable.
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