Why Data Center-Focused ETFs Might Be the Best Infrastructure Play for AI Investors

The Gap in Traditional AI Portfolios

Most investors chasing AI exposure load up on Nvidia, Microsoft, and other mega-cap tech stocks. But there’s a blind spot that’s costing them money: the physical infrastructure powering all that AI computation. While everyone’s watching chip makers, the real money is flowing into data centers—the unglamorous but essential backbone of the entire AI ecosystem.

This is where Global X Data Center & Digital Infrastructure ETF (NASDAQ: DTCR) stands out from typical best infrastructure ETFs. Instead of drowning portfolios in redundant tech holdings, it takes a hybrid approach: 51.8% in technology stocks and 45.2% in real estate investment trusts (REITs). That REIT weighting is radical compared to standard AI funds, most of which allocate less than 5% to property-based AI infrastructure.

The Data Center Spending Tsunami

The numbers tell the story. Global data center spending hit $455 billion in 2024—a staggering 51% surge year-over-year. And this is just the beginning. Alphabet recently committed $40 billion to Texas-based data centers alone. JPMorgan Chase projects global data center capital expenditures could reach $5 trillion over the next five years.

Here’s the critical insight: most of this spending doesn’t go to equipment makers. It flows directly to the property owners—REITs like Equinix and Digital Realty Trust. These companies are largely invisible in traditional AI portfolios, yet they command 21.35% of DTCR’s holdings. That’s not coincidence; that’s intentional best infrastructure ETF design.

The performance gap proves the point. Year-to-date, DTCR is up roughly 27%, outpacing the largest real estate ETF (which gained just 3.6%) while matching typical tech fund momentum.

Why Real Estate Wins in This Cycle

Data center REITs possess a superpower that most tech stocks lack: scarcity. Unlike software or chips that can scale infinitely, physical data centers take 12-18 months to build. U.S. vacancy rates have been contracting for over a decade, meaning landlords operate with virtually full buildings.

That scarcity translates to pricing power. Property owners are signing 10-year-plus leases from positions of strength. Tenants have no choice but to accept terms because alternatives are thin. For investors, this means predictable, growing cash flows with minimal vacancy risk—a luxury tech stocks can’t guarantee.

The Investment Case

If you’re looking for best infrastructure ETFs that actually capture AI’s real economic impact, DTCR bridges the gap between technology exposure and the overlooked real estate equation. It’s growth through scarcity, not speculation. The hyperscalers are spending, the landlords have leverage, and the vacancy rate tailwinds are just getting started. This isn’t a replacement for traditional tech holdings—it’s the missing piece most portfolios need.