Investors Eye Data Center Stocks Amid Tech Market Sell-Off

The ongoing tech share slump creates ripe opportunities for long-term investors in data center stocks. With moderate buy ratings and potential upsides over 30%, companies like Vertiv and Nebius Group signal confidence. Analysts suggest a strategic pivot to capitalize on generative AI demand.

Date: 29-03-2025

AI Rating: 7

Market Sentiment and Opportunities
As the technology sector grapples with a sell-off, data center stocks are emerging as potential winners amid the chaos. Key players in this space, like Vertiv, Nebius Group, Dell Technologies, and Vistra, are all trading at or near their 50-day lows, presenting attractive entry points for savvy investors.

Focusing first on Vertiv (NYSE: VRT), despite facing recent price pressure due to broader market fears, its primary focus on thermal management and power distribution places it favorably in the growing need for AI infrastructure. Analysts maintain a Moderate Buy consensus rating, with an average price target indicating over 65% upside potential. While details on earnings per share were not specified, such analyst sentiment signifies confidence in Vertiv’s long-term profitability outlook.

Turning to Nebius Group (NASDAQ: NBIS), the company is strategically positioned in the AI infrastructure domain, which is becoming a vital component of its revenue generation. Currently trading at a low of $24.71, the company’s revenue is predominantly generated from its AI segment, which accounted for over 50% of its earnings in Q4 2024. Although Nebius is not currently profitable, its projected revenue growth and plans to implement GPU clusters in partnership with NVIDIA could significantly enhance its earnings potential moving forward. Analysts project a staggering upside of over 122%, further endorsing the company's positive outlook.

Dell Technologies (NYSE: DELL) presents a compelling case with a moderate buy rating and a potential upside of 46.82%, amid a budding partnership with Apple to bolster their generative AI capabilities. Their modest P/E ratio of 17.0 also bolsters their attractiveness to long-term investors, as it indicates a potentially undervalued stock.

Finally, Vistra (NYSE: VST) is tapping into the rapidly expanding energy demands associated with the generative AI sector. While the company is experiencing pressure similar to its counterparts, its focus on sustainable energy solutions positions it as a favorable addition to investor portfolios. With a consensus Moderate Buy rating and a 31% upside potential, Vistra shows promise in meeting the energy needs of the expanding AI market.

Stocks: VRT NBIS DELL VST