Introducing the newest blog post from Extreme Investor Network: “Investing in Data Centers: Uncovering Opportunities in the APAC Region”
The Asia-Pacific region is poised to experience a surge in data center demand over the next few years, presenting a lucrative opportunity for artificial data center operators and hyperscalers looking to expand their presence in that part of the world. According to a recent report from Bank of America, APAC data center capacity is projected to double in five to six years, with a compound annual growth rate of 14% in the next five years, resulting in nearly 2 gigawatts of new capacity being added annually.
One of the key drivers of this growth is the increasing shift towards hyperscalers such as Microsoft, Amazon, Google, and ByteDance, with investments in data center infrastructure growing in scale. Despite this, APAC still under-indexes as a share of hyperscaler capacity, pointing towards a significant catch-up spend in the region in the near future.
Apart from the growing demand from hyperscalers, the adoption of generative AI models globally is expected to drive as much as one-third of incremental data center demand in the next five years, with APAC benefiting from the localization of latency-sensitive inference workloads. This presents a unique opportunity for investors looking to capitalize on the burgeoning data center market in the APAC region.
Bank of America has identified two key stocks that are well-positioned to capitalize on this growing trend: GDS Holdings and KT Corp. GDS, a high-performance data center developer, is the firm’s top pick given its strong foothold in the greater Chinese market and robust international expansion plans. With a bullish outlook on its growth potential, GDS presents a compelling investment opportunity in the AI data center space.
Meanwhile, KT Corp, a South Korean telecommunications company, offers defensive exposure in a falling rate environment with significant upside potential in the data center market. With its dominant position in the Korean data center market and strategic geographical advantages, KT Corp is another promising investment option for those looking to tap into the APAC data center growth story.
In conclusion, the data center market in the APAC region is set to experience considerable growth in the coming years, driven by the increasing demand from hyperscalers and the adoption of generative AI models. By investing in companies like GDS Holdings and KT Corp, investors can position themselves to benefit from this trend and unlock significant value in the rapidly expanding data center landscape in APAC. Stay ahead of the curve with Extreme Investor Network’s insightful analysis and expert recommendations on investing in the booming data center sector.