Data centers have been in the headlines for all the wrong reasons. Yet controversy about how much they tax cities’ power grids may turn out to be a good thing for the companies that own them.
As with e-commerce warehouses, demand for space in data centers skyrocketed during the Covid-19 pandemic as more of daily life moved online. However, the stocks haven’t been as good an investment. Over the past year, shares in U.S. data-center players returned minus 9% including dividends, compared with 5% gains on average for listed warehouse companies such as Prologis. Over a three-year period, they have underperformed logistics stocks and the S&P 500 index.