These dividend stocks could catch a tailwind from data center pushback

The backlash against artificial intelligence data centers could prove a tailwind for real estate investment trusts in the sector.

Protests have sprung up nationally as hyperscalers look to build data centers to train and run their AI models. Not only do the data centers take up large amounts of land, they consume enormous amounts of electricity and water and are noisy.

The debate is only expected to heat up heading into the midterm elections. A recent NBC News poll found that 69% of respondents oppose the construction of AI center centers in their area.

There are already more than 4,700 data centers across the country — a number expected to grow exponentially. PwC projects that annual data center spending will rise to $1.8 trillion in 2050 from roughly $800 billion in 2026. Some states are stepping up with legislation to restrict or ban construction, and a moratorium is already in place in New York.

Using REITs to play AI

While the hyperscalers are getting all the attention, another way to play the AI data center race is through real estate investment trusts. They are essentially landlords that build, own and then lease space to multiple tenants, including Amazon, Apple and Oracle, according to National Association of Real Estate Investment Trusts, an industry group.

“Amid political and community push-back, while new projects could see delay, it could be a positive for existing projects/DC [data center] REITs which have pricing power driven by continuously expanding compute demand,” Mizuho analyst Vikram Malhotra said in a Sept. 1 note.

Data center REITs make up 13% of the total U.S. REIT market capitalization of $1.5 trillion, Nareit said. The public REITs own about 275 data centers in the United States — less than 10% of the owner/operated and leased data centers in the country, the group said.

There are three data center stocks in the FTSE Nareit Equity REITs Index: Digital Realty Trust, Equinix and Iron Mountain.

Equinix, which recently signed a deal with Nvidia, is the largest, with a market value of roughly $102 billion. It has a 1.99% dividend yield and has climbed about 37% year to date. Its second-quarter adjusted funds from operations (AFFO) topped expectations when Equinix reported results and raised its full-year guidance in July.

Digital Realty Trust, with a market cap of $71 billion, yields 2.59% and is up more than 23% in 2026. In July, it reported adjusted FFO above analyst estimates and raised full-year guidance.

Iron Mountain has a 2.96% dividend yield, has soared 42% this year and sports a $34.7 billion market cap. Second-quarter AFFO beat expectations and Iron Mountain raised full-year guidance.

Tailwind for…