Data center stocks head into the week of December 22, 2025 at an unusual intersection: the AI infrastructure buildout is still accelerating, but markets are getting far less forgiving about how it’s funded, how quickly it pays back, and whether the power grid can keep up.
That tension was on full display from December 19–21—a three-day stretch that brought fresh evidence of a global data center construction wave, rising regulatory and political pushback on electricity costs, and renewed questions about the sustainability of debt-heavy AI expansion. At the same time, parts of the AI trade bounced late in the week as investors tried to stabilize into year-end. [1]
The next few sessions are also holiday-shortened. U.S. markets are set for an early close on Christmas Eve (Dec. 24) and closed on Christmas Day (Dec. 25), a setup that often produces thinner liquidity—and can amplify headline-driven moves in high-beta themes like AI and data centers. [2]
Below is what moved the sector in the Dec. 19–21 window, and what investors are likely to watch in the week ahead across chips, power and cooling, and data center real estate.
What just happened in data center stocks: the key themes from Dec. 19–21
1) Deal activity hit a 2025 record—fueling “scarcity value” and valuation nerves
A new data point that matters for both public stocks and private market comps: global data-center dealmaking surged to a record high in 2025, with more than 100 transactions totaling just under $61 billion through November, according to S&P Global Market Intelligence data cited by Reuters. The tally already surpassed 2024’s prior record of $60.81 billion. [3]
The bullish takeaway for listed names: capital is still chasing the theme, especially “picks-and-shovels” exposures and high-quality assets. The more cautious takeaway: with private equity eager to buy but reluctant to sell, Reuters cited an S&P Global Market Intelligence analyst warning that high-quality assets are scarce, keeping pricing competitive even as financing costs and leverage get scrutinized. [4]
A parallel headline from the same period underscored how widely this narrative is spreading: The Guardian pointed to the same “record investment” figure and described a continuing global construction wave tied to AI demand. [5]
Why it matters for the week ahead: when deal comps run hot, public-market “data center proxies” can trade more on sentiment and scarcity than near-term earnings—until a funding hiccup or capex disappointment forces a reset.
2) The “AI capex payback” debate returned—right as the Santa rally window opens
Reuters’ Wall Street Week Ahead column flagged two forces that have driven late-year volatility:
- scrutiny on massive corporate spending for the AI buildout, and
- shifting expectations for Fed rate cuts in 2026. [6]
Crucially for data center stocks, Reuters noted that questions about an Oracle-linked data-center project weighed on tech and other AI-related stocks during the week, even as cooler inflation data later helped lift sentiment. [7]
Reuters also highlighted the seasonal setup investors are watching: since 1950, the “Santa Claus rally” period has averaged a 1.3% rise for the S&P 500 over the last five trading days of the year and the first two of January—and in 2025 that window begins Wednesday and runs through Jan. 5. [8]
Why it matters for the week ahead: data center stocks tend to amplify “risk-on/risk-off” swings. If the market leans into a Santa rally, high-momentum infrastructure names can catch a bid—unless fresh headlines reignite capex anxiety.
3) Funding headlines got louder: SoftBank’s OpenAI scramble put AI data centers back in the spotlight
In one of the most consequential AI-infrastructure stories of the window, Reuters reported that SoftBank is racing to fulfill a $22.5 billion funding commitment to OpenAI by year-end, using multiple cash-raising avenues and potentially tapping margin loans backed by Arm shares. Reuters also reported SoftBank has sold its entire $5.8 billion Nvidia stake and reduced other holdings as part of its funding efforts. [9]
The core relevance for data center stocks: Reuters explicitly tied this capital scramble to the broader industry strain of financing ambitious AI data center projects worth hundreds of billions of dollars. [10]
Reuters also cited OpenAI CEO Sam Altman’s longer-term ambitions—30 gigawatts of computing capacity—as context for why the funding pipeline matters for the entire stack: chips, servers, power gear, cooling, and real estate. [11]
Why it matters for the week ahead: when mega-project financing becomes a headline topic, the market often bifurcates:
- “Revenue-now” suppliers (power/cooling, grid equipment, networking) can benefit if buildouts proceed.
- “Financing-sensitive” developers/operators can sell off if capital availability is questioned.
4) Policy risk re-entered the chip lane: U.S. review of Nvidia H200 sales to China
For the AI compute side of the data center ecosystem, Reuters reported the U.S. government launched a review process that could result in the first shipments of Nvidia’s H200 AI chips to China—a move that drew criticism from China hawks and revived debate about national-security tradeoffs. Reuters said license applications were sent for interagency review, with agencies given time to weigh in, and the final decision resting with President Trump. [12]
Why it matters for the week ahead: even if your focus is “data center infrastructure stocks,” chips set the cadence. Anything that changes the global supply/demand balance for high-end accelerators can quickly ripple into expectations for rack deployments, power density, cooling intensity, and the timing of new builds.
5) Power constraints became a front-page political issue—again
On the utility and grid side, the Associated Press reported Georgia regulators approved Georgia Power’s plan to increase electricity generation by 50% to meet projected demand, with the utility saying it needs 10,000 megawatts of new capacity, 80% intended to serve data centers. The AP reported construction costs of $16.3 billion, while staff estimates suggested customers could ultimately pay $50–$60 billion over coming decades including financing and allowed profit. [13]
The AP story also captured the central political risk investors keep circling: if demand forecasts prove overly optimistic—or if data centers relocate—ratepayers could end up bearing costs, and regulatory backlash could rise. [14]
Why it matters for the week ahead: the market is steadily repricing “AI = power bonanza” into a more nuanced story: power spending is real, but so are regulatory limits, public pushback, and long permitting timelines.
6) Cooling and water use shifted from niche to mainstream
A Reuters “Sustainable Switch” briefing put a sharper point on a theme investors increasingly treat as investable: data centers aren’t only power-hungry; they’re increasingly water-sensitive. Reuters cited the International Energy Agency expectation that global data center power demand will double by 2030, and noted that more operators are exploring water or specialized coolants because liquid cooling can be far more efficient at removing heat than air cooling. [15]
Why it matters for the week ahead: this supports the bull case for cooling and thermal-management suppliers, but it also raises permitting and community acceptance issues—especially in water-stressed regions.
Global buildout signal: Japan’s planned 3.1 GW “hub” highlights the next phase of demand
Not all the biggest data center growth signals are coming from the U.S. Reuters reported that Nanto city in Japan’s Toyama prefecture plans to launch what would become Japan’s largest data center cluster, with total power capacity of 3.1 gigawatts. The plan’s first phase would support about 400 megawatts and is targeted to be ready by the end of 2028, according to Reuters’ reporting. [16]
Reuters also cited IDC Japan research forecasting Japan’s data-center market could almost double to more than 5 trillion yen by 2028, driven by cloud and AI services. [17]
Why it matters for the week ahead: global-scale buildouts reinforce that “AI infrastructure” is not a single-quarter story—supporting multi-year demand visibility for equipment vendors and diversified operators, even if the market debates near-term capex timing.
Week ahead: what to watch for data center stocks (Dec. 22–26, 2025)
1) Holiday trading calendar: thin liquidity can magnify headlines
This is a holiday-shortened week. According to NYSE and Nasdaq schedules, U.S. equity markets are set to close early at 1:00 p.m. ET on Wednesday, Dec. 24, and remain closed on Thursday, Dec. 25. [18]
Investopedia also previewed the same setup—early close Wednesday, closed Thursday—while noting markets still face multiple major data releases. [19]
Practical implication for investors: in thin volume, the data center complex can move sharply on:
- a single funding headline (project delays, equity partners, debt issuance),
- an export-control update,
- or a macro surprise that moves rates.
2) Macro data still matters because “data center” is partly a rates trade
Reuters flagged that upcoming reports include Q3 GDP, durable goods orders, and consumer confidence, all landing in a week where investors remain focused on the Fed’s 2026 path. [20]
Investopedia highlighted the same cluster of releases and noted continued focus on jobless claims. [21]
Why rates matter for data center stocks:
- Data center REITs and operators are sensitive to financing costs and cap rates.
- Equipment and infrastructure suppliers often trade with “growth duration” characteristics.
- The entire AI buildout narrative gets repriced when real yields move.
3) The sector’s next “tell” is financing—not demand slogans
Across Dec. 19–21 reporting, the market’s recurring stress point wasn’t whether AI exists—it was whether AI buildouts can be funded at scale without balance sheet strain.
The Reuters SoftBank/OpenAI story is a prime example: when even major investors are described as “scrambling to finance ambitious AI data center projects,” the market tends to demand clearer proof of returns and better capital discipline. [22]
Meanwhile, Reuters’ dealmaking data shows private capital is still heavily committed—suggesting that, for high-quality assets, money is available, but pricing and terms may be getting tougher. [23]
The week-ahead watchlist question: which companies can convert AI enthusiasm into (1) signed contracts, (2) funded builds, and (3) profitable utilization—without surprises?
Data center stocks to watch: the “stack” that drives performance
Below are the main buckets investors tend to track—and the reasons they can diverge in a headline-heavy, low-liquidity week.
AI compute and networking (the demand “clock”)
These names often set the tone for the broader complex because they drive deployment pace and rack density:
- Nvidia (NVDA) — AI accelerator bellwether, with policy headlines now in focus after Reuters’ report on a review that could allow H200 sales to China. [24]
- Broadcom (AVGO) — crucial to networking and custom AI silicon themes (commonly tied to hyperscale buildouts).
- AMD (AMD) — another major accelerator competitor mentioned in Reuters’ export-policy context. [25]
What to watch: any follow-on policy commentary, supply chain notes, or hyperscaler capex chatter that changes expectations for 2026 deployments.
Power, cooling, and physical infrastructure (the “picks and shovels”)
This bucket increasingly benefits from the shift toward higher power-density clusters and liquid cooling trends:
- Vertiv (VRT) and broader thermal-management peers (benefiting from the “cooling is the bottleneck” narrative). Reuters highlighted growing attention to liquid cooling and efficiency. [26]
- Electrical equipment, grid, and backup power ecosystem — supported by the real-world utility buildouts described by the AP in Georgia. [27]
What to watch: regulatory decisions, grid expansion plans, and any community/political pushback that could slow permitting.
Data center REITs and operators (where financing meets fundamentals)
Investors often lump “data centers” together, but public-market behavior can differ sharply:
- Operators and REITs can trade like long-duration real estate, meaning rates and credit spreads matter.
- They can also trade like “AI infrastructure” when leasing demand is strong.
The dealmaking record reported by Reuters is constructive for sentiment here, but it also emphasizes the pricing competition for high-quality assets. [28]
Utilities and power producers (the second-order “AI trade”)
The Georgia Power decision shows the scale of grid spending being contemplated to serve data centers—along with the political risk around who pays. [29]
What to watch: new state-level rulings, cost-recovery frameworks, and contract structures that determine whether data-center load is a durable profit driver or a regulatory flashpoint.
The biggest risks for the week ahead
1) “AI bubble” jitters can resurface fast
Reuters explicitly pointed to scrutiny on massive AI spending and questions about when investments will generate returns as a source of equity swings. [30]
Any negative financing or utilization headline can hit the most leveraged parts of the ecosystem first.
2) Power politics and permitting constraints are not theoretical
The AP’s Georgia report underscores how quickly data center demand becomes a consumer-rate issue—and how that can shape the regulatory environment. [31]
3) Policy and geopolitics can whipsaw the compute layer
Reuters’ report on potential H200 sales to China shows how quickly export policy can change expectations. [32]
4) Cooling and water constraints are rising up the priority list
Reuters’ emphasis on water use and liquid cooling highlights that physical constraints are becoming strategic—and potentially political. [33]
Bottom line: a headline-driven, holiday-thin week where the winners may be the “funded and feasible”
From Dec. 19–21, the message for data center stocks was clear: AI demand is still driving a global buildout (with record deal activity and multi-gigawatt projects), but the market’s patience depends on financing clarity and power reality. [34]
With early closes and a shortened week ahead, trading can get jumpy—meaning the most actionable lens is often simple:
- Is the build financed?
- Is the power secured?
- Is the cooling plan credible?
- And can the company show a path from capex to cash flow?
That’s the filter likely to define the next leg for data center stocks into year-end and the first sessions of 2026. [35]
References
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