Top 12 Data Center Companies in the USA

Published on October 2, 2022 at 1:19 pm by Insider Monkey Team in Hedge Funds, Lists

In this article, we will take a look at 12 of the top data center companies in the US. If you want to see some more of the US’s top data center companies, go directly to Top 5 Data Center Companies in the USA.

As the world becomes more digital, data growth is accelerating and companies associated with data centers could benefit. According to some estimates, 80% of the world will be online by 2024 and consumers could spend $10.5 trillion online in that year. As a result of the growth, new digital services markets are expected to emerge and demand for data centers is expected to continue to grow.

Data centers are physical and virtualized infrastructure that supports applications and workloads. Data centers are considered critical to many businesses and support various business applications such as data storage, productivity applications, e-commerce transactions, powering gaming communities and much more.

The data center industry has already increased substantially due to the growth in the cloud.

More recently due to the global pandemic, remote work became more popular and data center demand has increased further.

Due to various trends such as growth in edge computing, AI, and machine learning, analysts expect the data center industry to continue to grow in the future. According to an estimate by Technavio, the global data center market could grow by a CAGR of 21.98% from 2021 to 2026 with incremental growth of $615.96 billion, with the US accounting for a substantial part of that growth. Given that many US companies are global, many US data center companies could also benefit from global demand growth.

DLR Most Expensive Computers In the World

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Methodology

For this list, we took 12 of the top data center companies in the USA and provided the number of hedge fund holders in our database who held shares in the same stock at the end of Q2 2022.

We also provided the 2021 revenue of each company based on data from Macrotrends.net.

Because many companies on this list sell both data center products and services as well as other services, our list was subjective and not ranked based on 2021 revenue alone.

Top 12 Data Center Companies in the USA

12. Digital Realty Trust, Inc. (NYSE:DLR)

Number of Hedge Fund Holders: 33

2021 Revenue: $4.428 billion

Digital Realty Trust, Inc. (NYSE:DLR) owns, acquires, develops and operates data centers and is focused on providing data center, colocations, and interconnection solutions for its customers across a range of industries. Given its growth, Digital Realty Trust, Inc. (NYSE:DLR) has increased its dividend for 17 straight years and has had a 10% CAGR in core FFO per share growth since 2005. The company is also the 8th largest publicly traded US REIT and ranks among our list of Top 12 Data Center Companies in the USA.

Like many other stocks, Digital Realty Trust, Inc. (NYSE:DLR) hasn’t done well this year with shares down 44% year to date.

On September 23, Brendan Lynch of Barclays also downgraded the stock to ‘Underweight’ from ‘Equal Weight’ and set a price target of $91, down from the previous $126. Lynch cites macro and industry wide factors that could affect growth and the company’s valuation.

33 hedge funds in our database of almost 900 hedge funds held shares in Digital Realty Trust, Inc. (NYSE:DLR) at the end of Q2 2022 with Renaissance Technologies among the top five hedge fund holders.

11. Iron Mountain Incorporated (NYSE:IRM)

Number of Hedge Fund Holders: 19

2021 Revenue: $4.492 billion

Iron Mountain Incorporated (NYSE:IRM) is a global leader in innovative storage, asset life-cycle management, as well as information management services. The company’s services include data centers as well as digital transformation, secure records storage, and information management. Due to its growth, Iron Mountain Incorporated (NYSE:IRM) has had 9 consecutive years of dividend increases. In Q2, Iron Mountain Incorporated (NYSE:IRM) achieved 30% revenue growth in its data enter division including 24% orgnaic storage rental revenue growth.

On September 12, Steve Sakwa of Evercore ISI set a $63 price target on Iron Mountain Incorporated (NYSE:IRM), up from the previous $57. Sakwa also has an ‘Outperform’ rating.

19 hedge funds in our database owned shares of Iron Mountain Incorporated (NYSE:IRM) at the end of the second quarter of 2022 with Millennium Management among the leaders.

10. Equinix, Inc. (NASDAQ:EQIX)

Number of Hedge Fund Holders: 38

2021 Revenue: $6.636 billion

Equinix, Inc. (NASDAQ:EQIX) is a digital infrastructure company that offers a wide variety of services including data centers. In terms of data centers, Equinix, Inc. (NASDAQ:EQIX) owns and operates a network of over 240 International Business Exchange data centers located in 70 major metros globally. The company’s data centers provide services to more than 260 of the world’s fortune 500 companies and has over 10,000 customers.

On September 23, Brendan Lynch of Barclays downgraded Equinix, Inc. (NASDAQ:EQIX) to ‘Equal Weight’ from ‘Overweight’ and lowered his price target to $674 from $822. Although the company has ‘strong pricing power relative to peers’, Lynch sees 5.8% annual funds from operations growth through 2024.

38 hedge funds that Insider Monkey tracks owned shares in Equinix, Inc. (NASDAQ:EQIX) at the end of the second quarter of 2022 with AEW Capital Management owning 373,148 shares.

9. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 52

2021 Revenue: $9.357 billion

American Tower Corporation (NYSE:AMT) is one of the world’s largest global REITS and is an owner, operator, and developer of multitenant communications real estate, which includes data centers. It also ranks among our list of Top 12 Data Center Companies in the USA.

On September 8, Philip Cusick of JPMorgan reiterated an ‘Overweight’ rating on American Tower Corporation (NYSE:AMT) as well as a $305 price target after the analyst met with CFO Rod Smith. Cusick was ‘encouraged’ by trends in Latin America as well as Africa and the analyst also had ‘incrementally positive views’ on the company’s U.S., Europe, and Asia-Pacific business.

52 hedge funds in our database were long American Tower Corporation (NYSE:AMT) at the end of Q2 with Akre Capital Management among the leaders.

8. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 65

2021 Revenue: $79.024 billion

Intel Corporation (NASDAQ:INTC) is a leading semiconductor producer that sells server processors, memory & storage, security features, network connectivity, and workload optimized solutions to data centers.

Due to various headwinds, Intel had a difficult quarter for Q2 2022, and the company’s Datacenter and AI Group sales fell 16% year over year to $4.6 billion.

Given the headwinds, broader market decline, and competition, shares of Intel Corporation (NASDAQ:INTC) have fallen by almost 50% year to date.

65 hedge funds in our database owned shares of Intel Corporation (NASDAQ:INTC) at the end of the second quarter with Generation Investment Management with the largest position at almost 14.8 million shares.

7. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 87

2021 Revenue: $16.434 billion

Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that sells CPUs and GPUs for data centers across the world and ranks among our list of Top 12 Data Center Companies in the USA.

Because it has used Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as a manufacturer, Advanced Micro Devices, Inc. (NASDAQ:AMD) has gained market share in the last ten years as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has moved ahead of Intel in terms of manufacturing the world’s smallest chips.

Advanced Micro Devices, Inc. (NASDAQ:AMD) has also gained substantial new business in terms of providing efficient chips to data centers.

Given the weaker market, however, shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) are down 56% year to date. In the second quarter, 87 hedge funds in our database owned shares with Fisher Asset Management among the top 5.

6. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 153

2021 Revenue: $257.637 billion

Although it is much better known for its search or YouTube business which account for a much bigger part of the company’s annual revenue, Alphabet Inc. (NASDAQ:GOOG) also has an extensive data center business given its cloud operations. With Google Cloud, businesses can use computing, storage, database, data analytics, AI and machine learning, and many other services on demand.

Alphabet Inc. (NASDAQ:GOOG)’s cloud business is growing pretty quickly. For the quarter ended June 30, 2022, Google Cloud accounted for $6.276 billion of sales, up from $4.628 billion in the same quarter of the prior year. If it continues to grow, Alphabet Inc. (NASDAQ:GOOG)’s business could eventually become profitable.

In the second quarter, 153 hedge funds in our database owned shares in Alphabet Inc. (NASDAQ:GOOG) with TCI Fund Management with a position of almost 2.5 million shares.

Click to continue reading and see Top 5 Data Center Companies in the USA.