If you want to get a piece of the data center buildout, the last thing I’d do is go knee-deep into overhyped stocks that already trade at triple-digit valuations. Data center stocks like Johnson Controls (NYSE:JCI | JCI Price Prediction), Cogent Communications (NASDAQ:CCOI), and NuScale Power (NYSE:SMR) are still under-the-radar and have plenty of upside potential left.
It may not look like it right now. However, time and time again, the AI trade has shown that shortages and rallies come very suddenly. Hyperscalers are spending hundreds of billions and are continuously increasing their expenditure on this buildout. This means that more and more components are outrunning supply. If you want the picks and shovels, it’s a better idea to look into places where the gold rush is yet to start.
Johnson Controls (JCI)
If you look up what Johnson Controls does, you will find out that this is an HVAC company that “integrates AI-driven technology.” This is your run-of-the-mill low-margin HVAC company that is growing slowly without anything exceptional going on, or at least that’s what you’ll think. However, these same HVAC companies are actually the ones cooling data centers.
Johnson Controls sells data center chiller platforms that are getting very popular. Backlog is at $18 billion, up 20% year-over-year, with total orders up 40% year-over-year. JCI stock is up less than 16% year-to-date. Thus, the stock has far more upside potential as other data center component suppliers have surged more during this timeframe. In fact, JCI stock is down 2.6% from its highs, and the stock hasn’t made much progress since early February.
You’re paying less than 27 times earnings for the stock, and this can actually look expensive if you look at future growth metrics. Analysts expect 19% annual EPS growth in the coming years, with sales growth a little above 6%.
But again, cooling technology is at risk of a shortage if the data center buildout continues. If we do see a shortage, both earnings and the stock will surge explosively.
Cogent Communications (CCOI)
The thesis with CCOI stock is not an explosive growth story, but rather a recovery aided by data center demand. Its data center business is not the hyperscale-cloud-owner model you might think of first. It owns and operates 100 data centers in North America and Europe, plus 86 edge data centers in North America, where customers can buy rack space, power, environmental controls, and direct connectivity into Cogent’s network. These data centers are related to the internet instead of actual hyperscale computing data centers.
The stock fell significantly because its legacy Sprint wireline division has been shrinking hard, with one report noting that quarterly revenue there fell from $118 million to $43 million by Q4 2025.
On the other hand, the newer wavelength business grew to $12.1 million in Q4 2025, up 73.7% year-over-year. This wavelength business is a growing optical transport platform that I believe can power a significant rebound. If the data center buildout keeps accelerating, the inter-data-center bandwidth could become scarce. Once that happens, a 300% gain from here wouldn’t be that hard.
CCOI stock is 57% below its 1-year high and now trades at just 1.2 times sales. Historically, the business has traded at 4.4 times sales. For Cogent Communications to trade this low during a data center boom is not something I expect to go on for too long.
NuScale Power (SMR)
NuScale Power is often seen as an energy play, but it becomes clear that this is turning out to be one of the strongest pick-and-shovel data center plays. When you look at the broader environment holistically, you’ll notice that governments worldwide are pressuring data center companies to get their own power. The grids worldwide are not powerful enough to take that much load.
Oil prices have been soaring recently, and constant geopolitical drama since 2022 has made fossil fuels unreliable for data centers. This leaves nuclear power, specifically Small Modular Reactors (hence the ticker SMR).
Data center companies can actually have their own SMRs up and running that will provide a stable 24/7 power supply. NuScale has yet to produce meaningful revenue since revenue is still mostly engineering and licensing work right now. The earliest you’ll see meaningful revenue is around 2029 when U.S. nuclear-powered data centers come online. It’s 3 years away, and I think the company can deliver 300%-plus gains as more and more data center companies look into nuclear power.
SMR stock has fallen by 78% from its one-year high. This is a cyclical stock that rises and falls with hype around nuclear stocks, and I expect the next leg up to start soon due to high oil prices.
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