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You can collect “rent” from the artificial intelligence boom – and you don’t have to build a data center to do it.

Right now, the bond market is creating an interesting setup for investors who know where to look.

I’m talking about data-center real estate investment trusts, or REITs.

Data-center REITs own some of the physical infrastructure behind the AI revolution. They lease space to customers that fill data centers with servers, chips and networking equipment. And they often return a portion of the income they generate to shareholders through dividends.

So, while most investors are focused on finding the next hot AI stock, there is another way to profit in the buildout: Own a piece of the real estate that makes it possible.

It’s a perfect setup for folks who don’t want to take on too much risk – or just prefer income over growth.

There’s just one problem.

The bond market has thrown dark clouds over the picture.

Higher bond yields have been putting pressure on REIT shares. Meanwhile, higher borrowing costs can squeeze cash flow, make new acquisitions harder to justify and put pressure on property values.

That matters because real estate is a capital-intensive business. When borrowing money becomes more expensive, even strong operators can feel the squeeze.

Plus, when a dividend stock offers a nice yield of, say, 5% – but a 10-year Treasury bond pays the same rate – most people are going to take the “risk free” government bond.

But a falling share price doesn’t always mean the underlying business is falling apart. And a lower purchase price means a higher dividend yield, as long as the payout holds up.

That raises an important question: Has the bond market created an opportunity to buy into the real estate behind AI at a better price and collect income along the way?

To help answer, Crystal and I invited Brad Thomas, founder of Wide Moat Research, to us on the latest Navellier Market Buzz.

Brad specializes in real estate and income investing. And right now, he sees a window opening in the sector. But he’s also warning investors about the temptation to chase what he calls “sucker” yields…

These are dividend yields that seem almost too good to pass up. But a huge yield can sometimes be a warning sign rather than a bargain.

To help spot the difference, Brad explains how he’s approaching the opportunity with data center REITs, what investors need to know – and he even identifies two favorite data-center REITs on his radar.

Click the image below to watch this week’s Navellier Market Buzz.

The Bigger Lesson…

There’s a broader investing lesson here.

Whether you’re looking at a REIT that pays a dividend or a fast-growing AI company, an attractive story is only the starting point.

The numbers still have to back it up.

Whether I’m looking at a REIT or an AI growth company, I want to see fundamentally superior numbers behind the stock.

It’s why, for 47 years, I’ve been developing a stock-selection system built on math and hard numbers.

I call the technology behind it Precursor Intelligence, or P.I.

It focuses on key factors like sales growth, earnings momentum, positive analyst revisions and institutional buying pressure. And that discipline is becoming even more important as AI changes the way investors find and trade stocks…

AI is an incredible tool. But relying on it for stock picks raises a concern I call “the coordination trap.”

If investors use similar tools and follow their recommendations, they can crowd into (and out of) the same stocks.

That makes it even more important to have an independent process for separating fundamentally superior companies from whatever happens to be popular at the moment.

My goal is to find fundamentally superior stocks before the crowd catches on.

And in my special presentation, I explain how P.I. works, the potential pitfalls of the AI coordination trap and why I believe select stocks could deliver 100% gains or more within the next six to 12 months.

Click here to watch my Precursor Intelligence video now.

Sincerely,

Louis Navellier

Editor, Market 360