Industrial property firm Goodman Group is converting its traditional warehouses into data centers to meet the surging demand for artificial intelligence infrastructure. Citi believes this trend will likely drive "double-digit medium-term earnings growth" and has added the Australian stock to its "Pan-Asia Focus list." Data centers are large buildings that house critical computing infrastructure and equipment.
The size of a data center is also measured by its access to power. The stock has risen by more than 40% this year in anticipation of the change in its business model. Citi's price target of 40 Australian dollars a share suggests that the stock could rise by another 12% from the current price of 35.77 Australian dollars. GMG-AU 5Y line Citi also compared Goodman to key global peers in the industrial real estate sector, such as U.S.-listed Prologis and U.K.-listed Segro .