Best 5 Data Center Stocks for February 2026

What Are Data Center Stocks?

Data center stocks refer to publicly listed companies that are actively involved in building and operating data centers. These companies are active in construction, power generation, thermal management, and data center operations. There are power-hungry, massive, warehouse-like buildings that house servers and related technology powering AI, the internet, and everything in the cloud.

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Why Should You Consider Investing in Data Center Stocks?

Data centers are not a new investment phenomenon, as the internet requires them to operate. The breakthrough in AI adoption in 2022 created a demand boost, as hyperscalers require massive data centers for AI-related operations. The data center market is on track to exceed $600 billion by the end of 2030, as part of the multi-trillion AI sector, with annualized double-digit growth rates.

Here are a few things to consider when evaluating data center stocks:

• Research data center stocks with revenue growth over the past three years.
• Diversify your data center portfolio with companies that construct data centers, provide thermal management, and server components.
• Mix your data center stock portfolio with companies involved in electricity generation.
• Analyze the balance sheet and avoid high-debt data center stocks.
• Check the Power Utilization Effectiveness (PUE), a core indicator of how efficiently the data center operates, together with occupancy rates

What Are the Downsides of Data Center Stocks?

The data center segment is highly competitive and requires massive capital expenditures to ensure servers run with the most cutting-edge technology. Energy availability is another significant factor, with some hyperscalers preferring colocation rather than relying on the energy provider. The AI hype has spiked valuations, which is adding to downside risks. The AI boom will eventually slow down, technological breakthroughs could result in lower data center demand than currently planned, and rising electricity costs could threaten capital expenditure plans.

Here is a shortlist of data center stocks to consider:

• GDS Holdings (GDS)
• Celestica (CLS)
• Arista Networks (ANET)
• Eaton Corporation (ETN)
• nVent Electric PLC (NVT)

An Update on Our Previous Best Data Center Stocks to Buy Now

In our previous installment, I highlighted the upside potential of Nebius Group and Applied Digital.

• Nebius Group (NBIS) - A long position in NBIS between 86.20 and 93.23

NBIS rallied by over 24% before reversing, but my stop-loss at 104.00 triggered, resulting in a profit of over 17%.

• Applied Digital (APLD) - A long position in APLD between 26.86 and 29.46

PLD jumped by more than 62% before reversing, but my stop-loss at 36.00 triggered, resulting in a profit of more than 39%.

GDS Holdings Fundamental Analysis

GDS Holdings (GDS) develops and operates high-performance data centers in China. Its core clients include hyperscalers, internet companies, financial institutions, telecommunications carriers, IT service providers, and domestic and multinational private-sector corporations. It also holds a non-controlling 35.6% equity interest in DayOne Data Centers Limited, which operates in International markets.

I am bullish on its operational performance, capital recycling through its C-REIT IPO, which raised $290.5 million, and its international expansion via its DayOne ownership, backed by $1.7 billion in private equity funding. GDS also benefits from high utilization rates, strategic capital allocation, and surging AI demand.

GDS Holdings Fundamental Analysis Snapshot

The price-to-earnings (P/E) ratio of 62.91 makes GDS an expensive stock. By comparison, the P/E ratio for the S&P 500 is 31.45.

The average analyst price target for GDS Holdings is 50.48. It suggests moderate upside potential with manageable downside risks.

GDS Holdings Technical Analysis

• The GDS D1 chart shows price action between its ascending 0.0% and 38.2% Fibonacci Retracement Fan levels.
• It also shows GDS Holdings inside a bullish price channel.
• The Bull Bear Power Indicator turned bearish, but shows an ascending trendline.

My GDS Long Stock Trading Recommendation

• GDS Entry Level: Between 43.00 and 45.50
• GDS Take Profit: Between 59.16 and 60.94
• GDS Stop Loss: Between 35.50 and 38.21
• Risk/Reward Ratio: 2.16

Celestica Fundamental Analysis

Celestica (CLS) is a design, manufacturing, hardware platform, and supply chain EMS company operating in 15 countries at 50 locations. It serves hyperscalers, aerospace and defense companies, industrials, HealthTech firms, capital equipment companies, communications companies, and enterprise markets.

I view the 20%+ plunge as a buying opportunity driven by its improved 2026 outlook, surging demand from hyperscalers, its Connectivity & Cloud Solutions (CCS) segment projected to grow 40% this year, and its capacity to fund $1 billion in organic expansion. Its SD6300 ultra-dense storage system grants it a competitive edge in the AI sector, and Celestica has solid relationships with several hyperscalers that generate revenue stability.

Celestica Fundamental Analysis Snapshot

The forward price-to-earnings (P/E) ratio of 39.19 makes CLS an expensive stock. By comparison, the P/E ratio for the S&P 500 is 31.45.

The average analyst price target for Celestica is 382.40. It suggests excellent upside potential with decreasing downside risks.

Celestica Technical Analysis

• The CLS D1 chart shows price action breaking down below its descending Fibonacci Retracement Fan.
• It also shows Celestica inside a horizontal support zone.
• The Bull Bear Power Indicator turned bearish but remains above its ascending trendline.

My CLS Long Stock Trading Recommendation

• CLS Entry Level: Between 273.99 and 293.87
• CLS Take Profit: Between 382.40 and 393.87
• CLS Stop Loss: Between 221.59 and 234.08
• Risk/Reward Ratio: 2.07

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