Jump on the AI trade with these 3 ASX stocks, says broker

Amazon's plan to invest $20 billion into artificial intelligence networks in Australia signals rivers of gold for investors, with mega-cap tech players Apple, Meta, Google and Oracle also targeting local internet capacity, according to Evans and Partners.  

The broker's tech analysts reckon the AI trade will revert from lukewarm to red-hot on the ASX as the market shrugs off worries that Chinese competition will force US hyperscalers to slash mega-capex budgets. 

"This is happening against a backdrop where private market valuations are still booming for data centre assets, and deal sizes continue."

Three AI train picks

After the arrival of China's Deepseek spooked investors' appetites for data centre plays in the Asia Pacific region the broker added that ASX investors now have a window of opportunity to jump on the AI trade.  

The analysts top pick for local investors is ASX 100-listed data centre giant NextDC (ASX: NXT). Shares fetched $14.01 on Wednesday and are down 6.7% in 2025, versus a 4.6% climb for the S&P/ASX 200 (ASX: XJO).

"The company has very strong shorter term prospects for more new business in Melbourne despite having just signed for 50MW+ recently. In addition, the company just broke through commercially in Asia with its 10MW deal."

NextDC is investing heavily in future data centre capacity given customers' demand is expected to rocket as AI requires mind-bending computing power. 

NextDC's capex budget in financial 2025 alone is $1.3 billion to $1.5 billion as it aims to cash in on the enormous budgets of US hyperscalers. 

The AI trade is not slowing down

E&P reckons it would be foolish for investors to get shaken out of the AI trade by short-term volatility, as it could still be a long-term wealth creator. 

"Various events earlier this year took the wind out of the sails of the AI trade," the broker said. "This began with DeepSeek rocking the market despite it likely being more bullish than not for NVIDIA, and then cascaded with broker reports that spooked the market into believing hyperscaler capex budgets might decline suddenly and sharply.

"So far this year though, both internationally and in Australia, the impact of AI on the data centre sector has continued to be very positive, with momentum sustaining as far as all indicators have shown."

Other picks

E&P also names Macquarie Technology Group (ASX: MAQ) as another fast-growing data centre and tech business that flies under the radar of growth investors. 

Shares have advanced 57.4% over the past five years, but have given back 28% in 2025 as some froth comes off the top. 

On Wednesday, the stock changed hands for $62.94, more than 30% below the $110.18 valuation of E&P. 

Macquarie Technology Group has delivered 20 consecutive halves of EBITDA growth to the end of 2025 and is investing heavily in its IC3 SuperWest data centre to meet the AI megatrend. 

The broker's third pick is recently listed DigiCo Infrastructure REIT (ASX: DGT). It's a real estate investment trust (REIT) that owns and operates data centres assets across Australia and the US. 

The stock hit the ASX boards last December at an initial public offer price of $5, but fell back to $3.93 as enthusiasm for the red-hot data centre sector cooled. 

E&P thinks the reaction is overdone and rates the stock likely to outperform the S&P/ASX 200 (ASX: XJO) over the next 12 months with a $4.56 valuation. 

It added that Amazon's cloud business Amazon Web Services is likely to be a massive demand driver in Australia and globally this year for data centre winners.