Recently, I’ve been looking into data center concept stocks and found some investment opportunities worth paying attention to.

Speaking of which, the performance of AI server tracks has indeed been explosive this year. Global data center investments are still increasing, and the entire industry chain can actually be divided into three parts: complete machine assembly, infrastructure, and key components. Each segment has leading companies vying for position.

I personally focus on five stocks. First, on the U.S. stock side, Celestica and Vertiv are core players in the data center concept stocks. Celestica leverages its manufacturing advantages with Google TPU and 800G switches; last year’s first three quarters saw revenue grow by 28% year-over-year, and EPS increased by 52%. The average target price from Wall Street is $374.50, representing a 22% upside from the stock price at that time. Vertiv is a leader in liquid cooling technology, a deep partner of NVIDIA, with recent order backlogs reaching up to $9.5 billion. Analysts forecast a 12-month target price of $206.07, a potential increase of 27%.

On the Taiwan stock side, I favor three stocks. Quanta, as a leading cloud server company, mainly serves mega clients like Google and AWS. Last third quarter, revenue grew over 20% year-over-year, with quarterly net profit surpassing 15 billion NT dollars. Wistron focuses solely on data center business, with 100% of revenue from this segment. Last year, total revenue exceeded 950 billion NT dollars, up 163% year-over-year, and EPS doubled to 275 NT dollars. Foxconn is the world’s largest ICT manufacturer, with over 40% global market share in AI servers. In the first three quarters last year, net profit increased by 35% annually.

Honestly, these data center concept stocks have already seen significant gains, and their P/E ratios aren’t cheap. The market’s focus has shifted from revenue growth to profitability and ROI, which is a critical turning point. Rising power costs and shorter depreciation cycles could suppress profits for some companies.

Additionally, it’s important to watch for signs of an AI bubble burst or a shift from growth chasing to profit verification, as the entire sector could experience sharp corrections. Before investing, consider whether cloud service providers can sustain capital expenditures, and how progress is with non-x86 architectures and self-developed chips. These factors will influence the future of traditional server manufacturers.

Geopolitical factors also need attention. China’s localization of AI chips, data sovereignty policies in various countries, and trade frictions are reshaping supply chains. Regulatory changes after the U.S. midterm elections and tariff pressures could also impact corporate gross margins.

Overall, data center concept stocks still have growth potential through 2026, but the market is quite crowded now. More rigorous risk management and stock selection are necessary. Companies with liquid cooling technology, high-density computing solutions, and deep collaborations with chip giants may still be favored, but their stock prices will likely be more volatile.