These dividend stocks could catch a tailwind from data center pushback
The backlash against artificial intelligence data centers could prove a tailwind for real estate investment trusts in the sector.
TL;DR
- Public backlash against AI data centers is increasing due to their significant land, energy, water consumption, and noise.
- This resistance, especially heading into midterm elections, could lead to legislation restricting or banning new construction.
- Such restrictions might inadvertently benefit existing data center REITs by limiting new supply and increasing the value of current capacity.
- REITs like Equinix, Digital Realty Trust, and Iron Mountain are identified as having strong performance and potential advantages due to their established infrastructure and experience.
- While some REIT stocks are not cheap, they are considered attractive within the AI sector due to tangible assets, recurring revenue, and dividend yields.