John Ballard, The Motley Fool

Thu, Jun 26, 2025, 1:05 AM5 min read

• Demand for AI data centers and servers is expected to grow significantly over the long term.

• Applied Digital is a small data center operator with attractive prospects.

• Dell's AI server business is booming, yet the stock trades at just 12 times forward earnings.

• 10 stocks we like better than Applied Digital ›

Investors looking tomorrow's winners should pay attention to the development of the world's technology infrastructure. Companies are going all-in on artificial intelligence (AI), and it's leading to a massive buildout of data center infrastructure.

The data center construction market is expected to increase from $240 billion in 2024 to $456 billion by 2030, according to Grand View Research. Another estimate from Statista finds that the AI server market could increase roughly 10-fold to $430 billion by 2033.

Fortunately, there are companies you can invest in that offer direct exposure to these markets. Here are two stocks to profit from this opportunity.

Applied Digital (NASDAQ: APLD) is a relatively small company with just $221 million in trailing-12-month revenue and a $2.2 billion market cap (share price times shares outstanding). It's a highly volatile stock, but this Dallas-based company has a lot going for it as a builder and operator of data centers.

The company's data centers are designed for high-performance computing, positioning it to benefit from the AI infrastructure boom. It currently has 286 megawatts of capacity for crypto mining customers at two locations in North Dakota, which are running at full capacity.

The negative is that Applied Digital is not turning a profit yet. But this is expected for a small business investing ahead of a huge opportunity. As new facilities open and revenue grows, profitability will follow. It's on schedule to have a new facility in Ellendale, North Dakota, open by Q4 2025, with two more facilities in development that should be ready within the next two years.

It has a deal with Macquarie Asset Management to invest up to $5 billion to complete the buildout of its Ellendale campus. This deal will allow Applied Digital to construct more than 2 gigawatts of data center capacity, positioning it to have ample power supply to meet growing demand for AI workloads.

Other catalysts include a potential sale of its cloud hosting business, which made up a third of its revenue. This will allow Applied Digital to double down on its data center business and potentially set the groundwork for the company to transition to a data center real estate investment trust (REIT).