According to the Zhongtong Finance app, since this year, global companies have been laying out AI in an unprecedented frenzy, driving up the value of global data center REITs assets. Investors who are extremely optimistic about the development of AI technology have bet on the sharp rise in the stock price of Australia's industrial real estate giant, Goodman Group, because its prime location and abundant financial resources will continue to propel its foray into the lucrative field of AI data centers. In the US, data center real estate trust company Digital Realty (DLR.US) has also seen strong growth in stock prices since 2023, rising by as much as 60% with the help of the AI boom. It recently announced that it will establish a joint venture with Blackstone, the world's largest alternative asset management company, to invest $7 billion in developing new large-scale data centers.

Goodman Group's stock price has risen 40% year-to-date in Sydney, making it the best-performing REIT target in the Bloomberg World REIT Index. The company owns a range of core properties in some of the world's hottest locations, including Sydney, Hong Kong, Los Angeles, and Frankfurt. More importantly, Goodman Group has been working hard to convert some large-scale industrial warehouses into large data storage spaces.

"The closer you are to your customers, the better," said Jun Bei Liu, portfolio manager at Sydney-based Tribeca Investment Partners. She added that Goodman Group is one of the top five companies in the fund she manages in terms of portfolio size, "The group has properties near the central business district, which are very valuable."

Goodman Group's rising stock price reflects investors around the world searching for ways to embrace the AI boom, even in markets dominated by the world's largest mining companies and major banks like Australia. "I would say this is the best AI game in Australia," Liu said, adding, "I think the company will definitely go higher."

Last month, the important component stock of the Bloomberg World REIT Index, Goodman Group, raised its annual profit growth forecast to 13% for the year ending June 30, up from 11%, citing the enormous demand for "growing digital economic infrastructure". Goodman Group said its strong balance sheet put it in a very favorable position in the face of ongoing turbulence in global real estate markets.

"Goodman's trend from the traditional industrial sector to AI data centers is not just a gimmick for AI," wrote Bloomberg Intelligence analyst Matt Ingram in a report. "Goodman can maintain strong profit growth by reusing existing assets and developing projects to meet global data center construction needs."

Valuation is a concern for some investors, with Goodman Group expecting a high PE ratio of 30x, higher than its 5-year average of 24x and Keppel DC REIT of Singapore's valuation of 20x. Howard Penny, an analyst at Citigroup, said that considering its strong growth potential, the valuation may be reasonable, as the ”global data power bank” that the company is developing is only a small part of its development projects.

Penny wrote: "As more potential 'power banks' turn to ongoing development work, this should continue to sustain Goodman Group's growth potential relative to its real estate peers." Penny rates Goodman Group's REIT assets as "buy." He added that Goodman Group is likely to exceed its recently raised profit growth forecast and could give strong new year expectations.

In the US, Digital Realty's stock price, focused on data center real estate, has already taken off.

Blackstone Group, the world's largest alternative asset management company, and Digital Realty, a data center real estate trust, recently announced the establishment of a joint venture and plans to invest $7 billion in developing new large-scale data centers in four key locations in Frankfurt, Paris, and northern Virginia.

The world's leading cloud service providers and AI technology leaders, such as AWS under Amazon, Google Cloud Platform, and Microsoft Azure Cloud Platform, are accelerating investment in and construction of large data centers in North America to meet the skyrocketing demand for cloud AI training/inference computing power, which is also the core logic driving up the stock price of one of the largest data center REITs in North America, Digital Realty, by nearly 60% since 2023.

Digital Realty is one of the largest data center real estate investment trusts (REITs) in North America, currently owning over 290 large-scale data centers. The company serves over 4,000 commercial clients, including global renowned enterprises such as social media Facebook and Instagram's parent company Meta Platforms, as well as IBM, JPMorgan, Oracle, and others. Digital Realty occupies an important position in the global, especially the North American data center market, is in the long-term trend of global enterprise digitization and data center expansion, its business model and strong customer base indicate that the company has long-term strong growth potential. On the product structure, the operating income of RMB 401/1288/60 million for 10-30 billion yuan products respectively.

The craze of artificial intelligence investment is gradually entering the second stage! The rise of data center REITs shows that it is not easy to stop.

As more and more companies around the world turn to cloud computing service platforms and invest heavily in developing generating AI application tools, such as ChatGPT, even under high uncertainty in the global economy, especially the real estate economy, global technology companies such as Google, Microsoft, and Amazon still maintain elasticity for large-scale data centers. The adoption of new technologies such as cloud computing, the Internet of Things (IoT), and generating AI applications such as ChatGPT in various industries and vertical areas is increasingly large in scale, which also makes technology companies' demand for data centers, the underlying infrastructure on which these technologies rely, increasingly strong, and data centers are the key assets driving new technologies including generating AI.

The wind of ChatGPT swept the world in 2023, and the heavy-weight Sora text and video model was released in 2024, and the unmatched performance of 'shovel seller' Nvidia in the AI field for consecutive quarters, which may mean that human society will gradually enter the AI era from 2024. Large-scale AI data centers can be said to be the core large-scale infrastructure projects of the AI era, which are vital to the all-round rise of generating artificial intelligence such as ChatGPT.

Amazon AWS recently announced a major investment plan, with a planned investment of up to 7.8 billion euros (approximately 8.44 billion US dollars) in Germany by 2040, to build a European AI cloud computing infrastructure, which is the core infrastructure of the company's AI services; Amazon also announced plans to invest 9 billion US dollars to expand its cloud computing infrastructure in Singapore over the next four years, which will double AWS's investment in Singapore and is expected to meet the growing demand for cloud computing services from Asia-Pacific customers while accelerating the demand for AI computing power.

"Advancing AI" conference, Nvidia's strongest competitor, AMD, expects the global AI chip market size to rise from the previously expected $150 billion to a staggering $400 billion by 2027, with the expected AI market size in 2023 at only about $30 billion. The well-known investment institution I/O Fund expects the total potential market size of the global AI data center market to reach $400 billion by 2027 and is expected to reach $1 trillion by 2030. All of these indicate that as the demand for high-performance AI chips increases, such as servers with Nvidia H100/H200/GB200 and AMD MIX300 series, increasingly large-scale AI data centers need to be built worldwide to support them.

Goldman Sachs believes that the craze of artificial intelligence investment, the 'stock fuel' of the global equity market, is far from depleted. In its latest forecast report, the institution states that the global stock market is still in the first phase of the investment craze led by artificial intelligence, but this craze has gradually expanded to the second, third, and fourth phases, boosting the value of more and more industries worldwide.

"If Nvidia represents the AI server chip phase that directly benefits the artificial intelligence stock trading craze,' then the second phase will involve other global companies, besides Nvidia, establishing AI-related infrastructure," Goldman Sachs wrote. "The third phase is expected to be dominated by companies that include artificial intelligence in their products to increase revenue, with software and IT services companies being the main players; and the fourth phase is a comprehensive improvement in production efficiency related to artificial intelligence, which is expected to be achieved in many businesses worldwide."

In the second phase of the artificial intelligence investment craze, the focus is on companies other than Nvidia that participate in the construction of AI infrastructure, including chip manufacturers such as TSMC, semiconductor equipment companies, and chip companies that focus on edge AI applications. The second phase of the AI investment boom discussed by Goldman Sachs includes semiconductor equipment companies such as ASML, Applied Materials, and cloud service providers, data center REITs, data center hardware and chip device companies other than Nvidia, software security stocks, and utilities. Goldman Sachs emphasizes that the AI investment craze will fully extend to real-world infrastructure because artificial intelligence will require massive AI data centers to run, which will drive everything from data center REITs to utility sectors.