Data Centers Are Unpopular. All the Better for Their Stocks.

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.

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