Data Center Construction Rapidly Expanding Beyond Traditional Markets
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 24 2026
0mins
Source: CNBC
- Market Shift: Texas is poised to surpass Virginia as the world's largest data market, with JLL reporting that about 64% of the 35-gigawatt construction pipeline is extending beyond traditional mature markets, indicating a significant market shift and growth potential.
- Low Vacancy Rates: Data center vacancies remained at a historic low of 1% at the end of 2025 for the second consecutive year, demonstrating strong market demand, with nearly all construction pipelines pre-committed by investment-grade tenants, thus mitigating bubble concerns.
- Surge in Capital Expenditures: The top five hyperscalers have planned capital expenditures of $710 billion in 2026, reflecting strong demand for infrastructure development, which has attracted a record $75 billion in financing, further propelling industry growth.
- Short-Term Strategy: Nuveen is adopting a build-and-sell strategy to capitalize on current strong demand while mitigating risks, with its global real estate head stating that there won't be an oversupply situation in the next five years, although long-term prospects remain uncertain.
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Analyst Views on VST
Wall Street analysts forecast VST stock price to rise
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 157.970
Low
217.00
Averages
240.09
High
287.00
Current: 157.970
Low
217.00
Averages
240.09
High
287.00
About VST
Vistra Corp. is an integrated retail electricity and power generation company that provides essential resources to customers, businesses, and communities from California to Maine. It operates a reliable power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities while taking an innovative, customer-centric approach to its retail business. Its segments include Retail, Texas, East, West, and Asset Closure. The Retail segment is engaged in retail sales of electricity and natural gas to residential, commercial and industrial customers. The Texas and East segments are engaged in electricity generation, wholesale energy sales and purchases, commodity risk management activities, fuel procurement, and logistics management. The West segment represents results from the CAISO market, including its battery ESS projects at its Moss Landing power plant site. The Asset Closure segment is engaged in the decommissioning and reclamation of retired plants and mines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Competitive Market Dynamics: Both Vistra and Constellation Energy are pursuing similar growth strategies, with Vistra agreeing to acquire Cogentrix for $4 billion to add 5.5 GW of natural gas capacity, which is expected to narrow the gap between the two companies and enhance market competitiveness.
- Generation Capacity Integration: Post-merger, Constellation and Vistra will have generation capacities nearing 60 GW and 50 GW respectively, serving 2.5 million customers, highlighting their significance and growth potential in the U.S. energy market.
See More
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