Most investors hunting for AI exposure gravitate toward semiconductor stocks or hyperscaler tech, missing the physical layer underneath: the cell towers, data centers, and fiber networks that make AI run. Pacer Data & Infrastructure Real Estate ETF (NYSEARCA:SRVR) was built around that idea, and its underlying holdings are trading at a discount that makes the income and upside case unusually compelling together.
What SRVR Actually Owns
SRVR tracks the Solactive GPR Data & Infrastructure Real Estate Index, targeting companies that generate revenue from data and technology infrastructure real estate. The portfolio is 59.1% real estate, dominated by data center REITs and cell tower operators. The three largest positions: Equinix (NASDAQ:EQIX | EQIX Price Prediction) at 16.6%, Digital Realty Trust (NYSE:DLR) at 15%, and American Tower (NYSE:AMT) at 14%. Those three names represent nearly half the fund.
Crown Castle (NYSE:CCI) and AT&T (NYSE:T) round out the notable holdings, alongside international tower operators and Asia-Pacific data center players. The fund carries a 0.49% expense ratio and has run since May 2018.
The return engine is straightforward: own the landlords of AI infrastructure and collect rent as demand for compute, connectivity, and 5G backhaul scales upward. When a hyperscaler signs a 10-year colocation lease at an Equinix campus or a carrier densifies its 5G network on American Tower’s rooftops, SRVR shareholders participate in that cash flow.
The AI Tailwind in the Numbers
American Tower’s data center segment generated $281 million in Q4 2025 revenue, up 19% year-over-year, with CEO Steven Vondran citing “increasing hybrid-cloud and AI-related workloads” and a “record quarter of signed retail new leasing” in data centers. The company guided FY2026 AFFO per share of $10.78 to $10.95 and is deploying $695 million toward data center development this year alone.
AT&T reinforces the thesis from the carrier side. The company now has 10.4 million fiber connections, up 11.5% year-over-year, and has posted fiber net adds exceeding one million for eight consecutive years. Management is committed to free cash flow of $18 billion or more in 2026, scaling to $21 billion or more by 2028. These reflect a business that has rebuilt itself around fiber and 5G convergence, backed by eight consecutive years of execution.
Equinix, the fund’s largest holding, is also up significantly. This is exactly the AI-driven colocation demand SRVR was designed to capture. Digital Realty has similarly gained about 26% over the past year.
Income You Can Count On (Mostly)
SRVR carries a 2.9% dividend yield at the fund level, modest for pure income seekers. The real income potential lies in the future, as telecom companies are aggressively hiking their payouts.
Crown Castle is the exception. The company cut its dividend last year from about $1.57 to about $1.06 per quarter in mid-2025, a roughly 32% reduction tied to Sprint cancellation headwinds and its pivot to a pure-play U.S. tower company. With only a 3.96% weighting in SRVR, the drag is real but contained.
Why the Discount Matters Now
Rate-sensitive REIT structures got punished during the high-rate environment of recent years. American Tower shares are down 14% over the past year, trading well below analyst consensus targets.
Moreover, most other REITs have been treading water for years.
This flatness is the price paid for rate sensitivity. If rates ease, the compression on these assets reverses. Investors collecting dividends while waiting for that repricing have been paid to be patient.
Three Tradeoffs to Understand First
- Rate sensitivity is structural, not temporary. These companies carry significant debt to finance long-lived infrastructure assets, so rising rates compress valuations and increase refinancing costs. Investors need a view on rates, not just on AI demand.
- Sector concentration is a feature and a risk. With nearly 46% of assets in just three names, SRVR is not a diversified ETF in any traditional sense. A deterioration in data center leasing economics or a major credit event at one of these names would hit the fund hard.
- The income yield is modest relative to pure dividend ETFs. SRVR is not competing with high-yield bond funds or covered-call strategies. Its value proposition is growth plus income, with the growth side dependent on AI infrastructure demand continuing to compound.
SRVR fits best as a core infrastructure sleeve for investors who want AI exposure without paying growth-stock multiples, need some income along the way, and can tolerate rate sensitivity. Investors expecting a pure income vehicle or short-term price momentum will find it a poor match.
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