3 AI infrastructure stocks backed by real data center demand

AI infrastructure stocks sit at the intersection of powerful themes investors are focused on right now, from inflation and interest rate decisions to energy markets and data demand. As central banks weigh growth against price pressures and fixed income markets react to every new data point, the physical backbone of AI, such as data centers, power, and connectivity, remains essential for a wide range of potential applications. In this article, we focus on companies that turn AI-related demand into real-world cash flow potential rather than speculative promises, and highlight three stocks from our AI Infrastructure Stock Screener that fit this theme.

Everpure(P)

overview: Everpure is a US-based data storage company that builds all-flash hardware and software to manage, protect, and move large amounts of enterprise data between on-premises and cloud environments, with products spanning FlashArray and FlashBlade systems, cloud-native Portworx, and the AI-powered Pure1 and Evergreen platforms. Everpure aims to become the core infrastructure for AI and high performance computing workloads by focusing on data reduction, protection, and encryption across block, file, and object storage.

operation: Everpure generates approximately US$3.9 billion in revenue from computer storage devices, including approximately US$2.7 billion from the United States and approximately US$1.3 billion from other regions.

Market capitalization: $24.2 billion

Everpure stands out in the AI ​​infrastructure space as it has already turned demand for storage and data services into significant revenue and subscription ARR. Its technology is closely tied to the GPU and data center construction story that many investors are focused on. The company has reported high gross margins, strong recent revenue growth, and improved profitability, but despite a very high P/E and premium valuation, there are warnings that some models are still trading below certain fair value estimates, which could be a win-win for investors. Recent product launches centered around AI-enabled data, partnerships with Veeam and NVIDIA platforms, and activist stakes from Jana Partners point to catalysts, but governance concerns such as insider sales and relatively static boards should also be considered.

Everpure’s premium P/E and AI exposure have divided investors, but the bigger question is whether its pricing fully reflects the company’s cash flow potential and board risk, or whether there’s something deeper hidden among its four key payoffs and one important warning sign.

Lumentum Holdings (LITE)

overview: Lumentum Holdings is a photonics manufacturer that supplies lasers, optical chips, and modules that move data in cloud and AI data centers, communications networks, and advanced consumer devices, along with industrial lasers used in semiconductor, solar power, display, and electric vehicle manufacturing. The company’s Cloud & Networking and Industrial Technology divisions position Lumentum at the center of high-bandwidth connectivity and precision manufacturing related to AI and electronics demands.

operation: Lumentum generates revenue across multiple regions, with major contributions coming from the United States (US$523.1 million), Thailand (US$494.4 million), Hong Kong (US$460.7 million), Mexico (US$318 million), and other Asia Pacific and EMEA markets.

Market capitalization: $56.7 billion

Lumentum Holdings is attracting attention because it is directly involved in building the optics of AI data centers. Recent quarters have been strong for revenue and margins, with analysts expecting rapid growth in both revenue and earnings. At the same time, the stock trades well below some fair value estimates and estimates of future cash flows, despite its high P/E ratio and the company’s high debt, insider selling, and financing risks. The combination of rapid growth, rich pricing, and real balance sheet and governance issues is building a situation that some investors may find interesting if they want exposure to AI infrastructure hardware and are prepared to consider whether current expectations leave enough room for regression in demand, execution, or margins.

Rapid demand for AI optics, a high P/E, and high debt make Lumentum Holdings feel like a puzzle that hasn’t been fully factored in yet. Get the big picture with 4 key rewards and 2 important warning signs

Vertiv Holdings Co (VRT)

overview: Vertiv Holdings Co provides the power, cooling, and physical infrastructure to keep AI data centers and communications networks running in more than 100 countries, from liquid cooling systems and thermal management units to power distribution, racking, and software that supports services such as online banking, streaming, gaming, and cloud computing.

operation: Vertiv has revenues of approximately US$7.0 billion in the Americas, approximately US$2.4 billion in Asia Pacific, and approximately US$2.3 billion in Europe, the Middle East and Africa, partially offset by approximately US$1.0 billion in intersegment internal sales due to its globally diversified operations.

Market capitalization: US$115.4 billion

Vertiv operates at the heart of building AI infrastructure, supplying liquid cooling and power systems used by data centers as GPU power density increases. This is supported by a reported US$15 billion backlog, rising margins, and analyst forecasts for strong revenue and revenue growth. At the same time, the company’s stock trades at a very high P/E ratio relative to its peers, it relies entirely on external borrowing for its debt, and it relies heavily on a small number of hyperscale customers, so any setbacks in AI data center spending or execution could have a significant impact. For investors weighing the risk of valuation and financing against a positioning in high growth, increasing profitability, and AI cooling, there are additional details to Vertiv’s story to consider.

Vertiv’s accelerating AI cooling story, sky-high P/E, and reliance on debt begs a simple question. Are investors paying attention to the right metrics? Take a look at our analysis report for Vertiv Holdings Co before making your decision.

These three stocks are just a starting point. Simply Wall St’s complete AI Infrastructure stock screen highlights an additional 49 companies with similarly compelling cash flow stories, balance sheet profiles, and AI-related infrastructure roles that could be important to your portfolio. Unlock deeper insights and identify your own highest-conviction ideas by using the AI ​​Infrastructure Stock Screener’s filters to analyze the specific catalysts and stories that matter most to you.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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