DTCR: AI Infrastructure Stocks Look Fairly Valued

Summary

• DTCR provides exposure to companies operating data centers and digital infrastructure, with a focus on physical assets rather than intellectual property-driven businesses like Nvidia (though DTCR does own NVDA).
• The fund's portfolio includes major players like American Tower and Equinix, but also carries geographical risk with significant Chinese holdings.
• Valuation metrics suggest DTCR is trading at a slight premium, with a forward P/E ratio of 23.80x and an expected return on equity of 10.46%.
• While DTCR offers moderate returns of 8% annually, its growth potential is limited by high capital expenditure and average returns on equity, justifying a neutral view at present.

J Studios

Introduction

Data Center & Digital Infrastructure ETF (NASDAQ:DTCR) is an exchange-traded fund that provides investors with exposure to companies that operate data centers and other digital infrastructure "supporting the growth of communication networks". The fund was set up

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.