Newmark Group and the Data Center Boom: A High-Conviction Play in AI-Driven Infrastructure

The global data center industry is undergoing a seismic transformation, driven by the insatiable demand for artificial intelligence (AI) and high-performance computing (HPC). At the heart of this shift lies Newmark Group (NMRK), a commercial real estate services firm that has redefined its role from a traditional broker to a strategic architect of the digital infrastructure revolution. With a 21.8% year-over-year revenue surge in Q2 2025 and a 62.5% volume growth in investment sales, Newmark's financial performance mirrors the explosive momentum of the AI-driven data center boom. But what truly sets the company apart is its ability to align capital, technology, and global expansion in a way that positions it as a high-conviction growth stock for the decade ahead.

Strategic Financing of AI Infrastructure: A $15 Billion Bet

Newmark's most striking recent achievement is its role in structuring a $7.1 billion construction loan for a 1.2-gigawatt AI data center in Abilene, Texas. This loan, part of a $15 billion joint venture between Crusoe, Blue Owl Capital, and Primary Digital Infrastructure, underscores Newmark's mastery of complex capital arrangements. The project, which will span eight buildings and deliver 1.4 gigawatts of power by 2026, is emblematic of the firm's ability to bridge institutional capital with cutting-edge technology. By facilitating such deals, Newmark is not merely reacting to market demand—it is shaping the very infrastructure that will power the next wave of AI innovation.

The significance of this project lies in its alignment with broader industry trends. Newmark's 2025 U.S. Data Center Market Outlook reveals that AI-related spending on new data center construction has reached an all-time high of $31.5 billion annually. Yet, the sector faces a critical bottleneck: projected power demand from existing and planned U.S. data centers exceeds utility supply by 50%. Newmark's partnerships with energy-focused developers like Crusoe—whose innovative use of natural gas and small modular reactors (SMRs) addresses this gap—highlight the firm's forward-looking approach. By integrating energy solutions into its real estate expertise, Newmark is solving a systemic challenge that could otherwise stifle growth.

Global Expansion: From Paris to Asia

While Newmark's U.S. operations dominate headlines, its global expansion strategy is equally compelling. The firm has aggressively expanded its footprint in Europe through strategic acquisitions of firms like BH2, Gerald Eve, and Harper Dennis Hobbs, creating a network of over 20 offices across the continent. These moves have not only diversified Newmark's revenue streams but also positioned it to capitalize on the European data center boom, where property values are expected to recover sharply in 2025.

In Asia, Newmark's presence in Singapore, Hong Kong, and India is equally strategic. The firm's services—ranging from site selection to incentive optimization—address the region's unique regulatory and energy challenges. For instance, its ability to secure tax credits and grants for data center developers in India, where renewable energy adoption is accelerating, provides a competitive edge. With nearly $350 million in non-U.S. revenue in 2024 (a 60% CAGR since its 2017 IPO), Newmark's international operations are no longer a side note but a core driver of its growth narrative.

Financial Resilience and Institutional Confidence

Newmark's Q2 2025 earnings report, which delivered a 40% year-over-year increase in adjusted EPS to $0.21, validates its strategic bets. The firm's Capital Markets division, responsible for 32.7% revenue growth, is now a powerhouse in a sector where demand for financing is outpacing supply. This financial strength has attracted institutional attention: Goldman Sachs and Jane Street Group increased their stakes in Q2 2025, while six analysts upgraded the stock to “Buy” and two to “Strong-Buy.”

The company's long-term guidance—$1.40–$1.50 adjusted EPS for 2025 and 15.17% earnings growth in FY2026—further reinforces its appeal. At a forward P/E ratio of 12x, Newmark trades at a discount to its historical average, suggesting undervaluation relative to its growth trajectory.

Risks and Mitigations

Critics may question Newmark's exposure to power shortages and regulatory hurdles in data center development. However, the firm's partnerships with energy innovators and its focus on sustainability-linked financing structures mitigate these risks. For example, its work with Crusoe on SMR-powered data centers not only addresses energy constraints but also aligns with ESG trends, enhancing long-term asset value.

Investment Thesis

Newmark Group is a rare combination of a traditional real estate firm and a tech-savvy infrastructure enabler. Its strategic investments in AI-driven data centers, global expansion, and innovative financing models position it to outperform in a sector where demand is growing at a 20% CAGR. For investors seeking exposure to the digital infrastructure revolution, NMRK offers a compelling blend of growth, resilience, and institutional credibility.

In an era where data is the new oil, Newmark is the pipeline. The question is not whether the data center boom will continue, but whether investors can secure a stake in the companies that will build its foundations. Newmark Group, with its visionary leadership and operational agility, is poised to lead the charge.