The data center sector is experiencing a robust resurgence, prompting investors to explore not only the companies directly involved in building these facilities but also the essential raw materials required for their operation. As demand for advanced chips and components surges, the need for critical rare earths and metals is becoming increasingly apparent, creating a bottleneck that could limit growth potential in this expanding market.
Two exchange-traded funds (ETFs) stand out for investors looking to capitalize on this trend. The Global X Rare Earth & Critical Minerals ETF (EART) offers exposure to a diverse range of companies involved in the production of vital materials, while the ProShares S&P Global Core Battery Metals ETF (ION) focuses on metals crucial for battery technology, which overlaps with data center needs. Both funds have shown impressive year-to-date returns, with EART up around 20% and ION approximately 30%.
For those seeking U.S.-based opportunities, MP Materials Corp. emerges as a strong contender. With the only commercially viable rare earths mining and processing site in the U.S., MP is well-positioned to benefit from rising domestic demand and has garnered a consensus Buy rating from analysts, suggesting potential for further upside.
Source: marketbeat.com