1 Canadian Stock Set to Make a Fortune From Canada’s Data Centre Buildout

Brookfield Corp (TSX:BN) is a Canadian asset manager deeply involved in data centres.

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Key Points
  • With Canada's data centre footprint surging from five to 96 hundred planned facilities, the current domestic buildout presents massive capital growth opportunities for infrastructure providers.
  • Brookfield Corp leverages this buildout via Brookfield Infrastructure Partners  for real estate leasing and Brookfield Renewable Partners for clean data centre power generation.
  • Investing via structural real estate rather than hardware provides a downside hedge; Brookfield's heavy-walled, temperature-controlled facilities can readily pivot to cold logistics or battery storage if tech spending cools.

The data centre buildout is coming to Canada.

Currently, Canada has five hyperscale data centres.

Another 96 are in development. Reportedly, one of those is a massive complex being developed by Meta Platforms (NASDAQ: META).

In the United States, data centres have become controversial. Some feel the centres are putting unnecessary strain on local power grids, while residents near Elon Musk’s “natural gas-fueled” data centres report a propane-like smell in the air and visible “heat shimmer” when the natgas generators are running.

The debate rages on.

In the meantime, there is no doubt that there are opportunities for investors to make money off the data centre buildout now taking place in Canada. Here’s one:

Abstract technology background image with standing businessman

Source: Getty Images

Brookfield

Brookfield Corp (TSX: BN) is one Canadian company that could make an absolute fortune from the data centre buildout underway right now. It has an infrastructure subsidiary that is one of the biggest data centre builders in Canada – indeed, it’s active in building data centres in the United States as well. The company also has a renewable energy subsidiary that is involved in powering data centres. So Brookfield is involved in the data centre buildout in many ways.

Massive infrastructure buildout at Brookfield’s Infrastructure subsidiary

First off, Brookfield’s infrastructure subsidiary Brookfield Infrastructure Partners (TSX: BIP.UN) is involved in physically housing many of the centres being built in Canada. It owns the physical real estate and leases it out on 10-plus-year terms; it does not require high utilization to make money off its data centres, just enough to keep its clients (tech growth companies) from going broke. So, it’s a relatively low-risk style of data centre investment, at a time when people are asking questions about “tokenmaxxing” and companies cutting back on AI usage.

Second, we have Brookfield Renewable Partners (TSX:RNW.UN). This is the company that powers many AI data centres in both Canada and the United States. It is already providing billions of dollars per year worth of renewable power to Alphabet (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT). Its subsidiary, Westinghouse, was also recently in discussions with the Trump administration to build eight nuclear power plants for the government to power data centres. So a lot of optionality there.

Options in case the AI data centre boom goes bust

One great thing about Brookfield’s investment in AI on the infrastructure end rather than the hardware end is that the company can convert some of its facilities to other uses if AI goes bust. Options include cold storage, food storage, battery storage, and standard logistics. Facilities originally used for data centres can be converted into facilities like those just mentioned, as they depend on the same structural features (thick walls and cold temperatures).

Foolish takeaway

Taking everything into account, Brookfield Corp looks like a pretty smart bet on the AI infrastructure buildout. It has plenty of investments in AI data centres, is protected from some of the worst effects of a possible AI bubble, and has options for converting its facilities should their original AI purpose be underutilized. Overall, I’m comfortable holding Brookfield stock.

Fool contributor Andrew Button has positions in Brookfield Corporation. The Motley Fool has positions in and recommends Brookfield Corporation. The Motley Fool recommends Alphabet, Brookfield Infrastructure Partners, Brookfield Renewable Partners, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

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