Investing.com -- Citi raised its global data center growth forecasts as hyperscale investment in high-performance computing and AI workloads accelerates, and named a list of stocks it expects to benefit across multiple sectors.

The bank said it has refreshed its Global Data Center Industry model to reflect recent results, strong demand for token consumption, faster chip sales and contributions from China, which had previously been excluded from its forecasts.

Citi now forecasts global data center IT load will grow at a 25% compound annual rate, rising from 121 gigawatts in 2026 to 370 gigawatts in 2031. The growth outlook assumes annual absorption of IT load accelerating from 35 gigawatts in 2026 to 60 gigawatts in 2031.

Citi said it believes "the rising tide of demand for AI/HPC workloads will partly originate from expanding demand for agentic AI workloads, including broader enterprise adoption."

Supply has been constrained in the short term by energy availability in certain markets, along with local and state actions that could extend review timelines, the bank noted. Texas and New York have implemented temporary pauses on approvals for future data center development.

Citi said the rapid response from data center developers and their customers, including proposals designed to maintain or reduce utility bills for ratepayers, "should facilitate timely and constructive resolutions." In the meantime, it said projects already approved with allocated energy could become more valuable, and pre-leasing could extend well into 2028-2030 as hyperscalers, neoscalers and frontier model developers look to lock up capacity ahead of anticipated demand growth.

Citi forecasts bookings for data center IT load to reach 35 gigawatts in 2026 and accelerate to 40 gigawatts in 2027, "significantly ahead of our prior forecasts."

Across sectors, Citi recommends buying data center stocks Equinix, Digital Realty Trust and TeraWulf, citing a positive multi-year outlook for demand. Within U.S. utilities, the bank named NextEra Energy and FirstEnergy as potential winners.

In semiconductors, Citi remains bullish on AMD and Celestica, while within internet stocks, the bank remains positive on Amazon, Alphabet and Meta.

In software, Citi favors Microsoft, Oracle and neocloud providers.