NEW YORK, Dec. 28, 2025, 1:03 p.m. ET — Market closed
Data center stocks are heading into the final trading days of 2025 with a familiar set of tailwinds—and a growing list of real-world constraints investors can’t ignore. The AI buildout that helped power much of this year’s equity gains remains the dominant demand driver for everything from GPUs and networking gear to cooling systems and “four walls” colocation space. But as Wall Street heads into a holiday-shortened week, thin liquidity, year-end positioning, and the market’s next read on the Federal Reserve are likely to decide whether the sector starts 2026 on a fresh surge—or a choppy reset. [1]
Where the market stands now—and why data center stocks are in the spotlight
Friday’s post-Christmas session offered a textbook example of late-December trading: muted moves, lighter volume, and investors largely unwilling to take big bets ahead of the year’s finish. The Dow fell 0.04%, the S&P 500 slipped 0.03% to 6,929.94, and the Nasdaq eased 0.09%, according to Reuters. Volume across U.S. exchanges came in at about 10.22 billion shares versus a recent 20-day average near 15.98 billion—conditions that can amplify swings when catalysts hit. [2]
That’s a key setup for “data center stocks,” a bucket that spans multiple industries but trades around one shared narrative: the world is buying—and powering—more compute. Market watchers are still eyeing the psychological 7,000 level for the S&P 500, with Reuters noting the index was about 1% away from that milestone and on track for its eighth straight month of gains. [3]
For investors in digital infrastructure names, the big question is whether 2025’s powerful AI-led trend can broaden without overheating valuations—and whether the Fed’s next signals keep financial conditions supportive for capex-heavy growth companies and rate-sensitive REITs. [4]
The biggest 48-hour headline for the AI data center supply chain: Nvidia
Among the sector’s bellwethers, Nvidia remained a focal point into the weekend. Reuters reported that Nvidia climbed about 1% Friday after the AI chipmaker agreed to license chip technology from startup Groq and hire its CEO—an attention-grabbing move as competition and specialization accelerate across AI hardware and inference. [5]
Strategists also continue to frame the year-end tape as constructive, even after a pause. “We’re just simply catching our breath,” Ryan Detrick, chief market strategist at Carson Group, told Reuters, while pointing to the seasonal “Santa Claus rally” window that runs through early January. [6]
Meanwhile, data-center investors are digesting a separate Nvidia catalyst that has implications for global AI supply: a Reuters report dated Dec. 22 said Nvidia aims to begin shipping H200 AI chips to China by mid-February 2026, subject to approvals and other conditions—an issue closely watched by markets because China demand can materially influence AI hardware volumes and mix. [7]
The power problem is no longer theoretical—and it’s reshaping data center economics
If AI chips are the “brains” of the data center boom, electricity is the oxygen—and that’s where the most underappreciated risk (and opportunity) is developing.
In a report published Saturday, the Financial Times described how data center developers facing multi-year waits to connect to the grid are increasingly turning to on-site power solutions, including aeroderivative turbines adapted from jet engines and diesel generators, to bring capacity online faster. The report highlighted the scale of the bottleneck—citing delays that can stretch as long as seven years—and described rising demand for equipment from suppliers tied to distributed generation. [8]
For stock investors, that matters in two ways:
- It can lift “picks-and-shovels” beneficiaries across power equipment, engines, and backup generation, as well as the companies that build cooling, electrical, and energy-management systems for dense AI racks.
- It can pressure data center returns and timelines if “bridge power” and backup solutions raise operating costs, complicate permitting, or trigger community and regulatory pushback around emissions and local utility bills—concerns the Financial Times noted are already part of the conversation. [9]
In other words: the data center trade isn’t just about who has the best chips or the most land. It’s increasingly about who can secure megawatts—reliably, quickly, and at a cost that still pencils out.
Fed minutes and rate expectations: why they matter for data center REITs and capex names
With markets closed today, the next “macro” catalyst that could ripple through data center stocks is the Fed.
Reuters’ “Week Ahead” preview flagged the upcoming release of minutes from the Federal Reserve’s most recent meeting as a key event in the holiday-shortened week. It also noted that the Fed lowered its benchmark rate by 75 basis points over its last three meetings of 2025, bringing it to 3.50%–3.75%—and that investors remain highly focused on when further cuts might come. [10]
That rate backdrop is especially relevant for two major segments of the data center theme:
- Data center REITs and colocation landlords (often viewed through names like Equinix and Digital Realty) tend to be sensitive to rate expectations because yields influence valuation multiples and because refinancing costs and development economics can change quickly as rates move.
- Infrastructure suppliers and AI hardware beneficiaries can trade more like growth/tech cyclicals—responding to risk appetite, liquidity, and any perception that AI-related capex is accelerating or cooling.
Reuters also noted signs of rotation in recent weeks, with some non-tech groups shining while the S&P 500 tech sector had declined more than 3% since early November. For data center stocks, rotation can influence which sub-theme leads: “AI hardware beta” versus “digital infrastructure and cash-flow durability.” [11]
What investors should know before Monday’s open: the week’s schedule and year-end microstructure
With the New York Stock Exchange closed today, the next actionable reality is the calendar—and the calendar is compressed.
Investopedia’s weekly preview noted that traders face another holiday-shortened week with New Year’s Day on Thursday. It also highlighted that bond markets close early at 2 p.m. ET on Wednesday, while stock markets operate on a normal schedule on New Year’s Eve—and that the first session of 2026 is Friday. [12]
Investopedia’s calendar also points to market-moving data releases and events that can affect rate expectations and risk appetite—two levers that can quickly reprice data center stocks: [13]
- Monday (Dec. 29): Pending home sales (November)
- Tuesday (Dec. 30): S&P Case-Shiller Home Price Index (October), Chicago Business Barometer (December), and December FOMC meeting minutes
- Wednesday (Dec. 31): Initial jobless claims (week ending Dec. 27) + early close for U.S. bond markets at 2 p.m. ET
- Thursday (Jan. 1): New Year’s Day holiday (markets closed)
- Friday (Jan. 2): First session of 2026
A practical checklist for data center stock investors before the next session
Heading into Monday, investors focused on data center stocks typically keep three “dials” front and center:
- Rates and the dollar: Anything that shifts the implied path of rate cuts can move REIT multiples and capex affordability fast. (The Fed minutes are the headline risk.) [14]
- AI capex confidence: Nvidia headlines often act as a real-time proxy for sentiment across the AI data center buildout, even for names that don’t sell chips. [15]
- Power availability and permitting: The growing reliance on on-site generation to bypass grid delays underscores that “power is the new land.” This can create winners among suppliers—and create friction for developers if costs and regulation tighten. [16]
And because trading volumes can be thinner into year-end, moves may be sharper than fundamentals alone would justify—especially if institutional portfolios are still finishing end-of-year adjustments. [17]
Bottom line
The data center stocks story remains one of the market’s most consequential themes because it sits at the intersection of AI demand, infrastructure buildout, and macro conditions. But heading into the next session, investors should treat year-end price action with respect: low liquidity can distort signals, while the Fed minutes and rate expectations can quickly tilt leadership between AI hardware, infrastructure suppliers, and data center REITs. [18]
References
1. www.reuters.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.ft.com, 9. www.ft.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.investopedia.com, 13. www.investopedia.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.ft.com, 17. www.reuters.com, 18. www.reuters.com
