Private Credit Is Reshaping Data Center Stocks Investors Should Watch

Digital infrastructure stocks are sitting at the intersection of two powerful forces: the growing need for data centers and a funding market where private credit giants like Pimco are stepping in as key lenders. When traditional bond markets become harder to tap, well financed projects that attract private capital can look very different from those that struggle to secure funding. This article looks at how that shift in financing could affect data center and cloud hosting businesses, and reveals 3 stocks from our Digital Infrastructure (Data Center) Stocks screener that appear positively exposed to this trend.

Guidewire Software (GWRE)

Overview: Guidewire Software provides cloud based software platforms that help property and casualty insurers run critical functions such as policy administration, claims handling, billing, pricing, reinsurance, customer data and digital engagement, as well as tools for analytics, AI driven risk assessment and cyber risk modeling.

Operations: Guidewire generates about US$1.4b in revenue from Software & Programming, with around US$914.2m from the United States, US$219.2m from EMEA, US$166.2m from Canada, US$103.0m from APAC and the remainder from other Americas markets.

Market Cap: US$10.1b

Guidewire Software sits at the heart of insurers’ shift to cloud and AI, with recurring revenue from its platform and recent Q3 results showing strong ARR momentum, 19% ARR growth and a raised full year outlook. The business is tied to digital infrastructure and data center demand and also benefits from software like PricingCenter, Predict and HazardHub that help insurers price and manage risk more intelligently. However, investors should weigh a high P/E ratio, reliance on external funding and recent insider selling against the company’s improving margins, growing cloud customer base and the positive read through from private capital flowing into data heavy infrastructure that supports Guidewire’s services.

Guidewire Software’s accelerating ARR and insurer adoption raise a big question: is the current P/E multiple a ceiling or just the entry ticket to a larger move that hinges on one overlooked factor in the analyst forecasts for Guidewire Software

Ciena (CIEN)

Overview: Ciena is a network technology company that supplies the high capacity optical hardware, routing systems, software and services that telecom operators, cloud providers and enterprises use to move data between and within data centers around the world.

Operations: Ciena generates about US$5.6b in revenue, primarily from Networking Platforms at roughly US$4.4b, with additional contributions from Global Services at about US$681.1m, Platform Software and Services at US$370.6m, and Blue Planet Automation Software and Services at US$105.3m.

Market Cap: US$67.9b

Ciena is positioned at the core of the AI and cloud build out story. Web scale customers use its optical platforms and pluggable transceivers to connect data centers as AI traffic grows, and projects increasingly lean on private financing such as Pimco’s data center deals. Earnings growth, improving margins and a strong position in data center interconnect have attracted interest. However, a high P/S ratio and reliance on a small group of large customers mean results can be sensitive to order timing, technology shifts and supply constraints. For investors focused on digital infrastructure, the key question is whether the combination of record orders, AI centric demand and private capital support is enough to justify Ciena’s growth profile and risk concentration.

Ciena’s AI centric orders and record customer demand suggest a story investors may be underestimating. However, the real tension lies in how concentrated that growth is in the analyst forecasts for Ciena

Agilysys (AGYS)

Overview: Agilysys develops hospitality software that ties together hotel property management, point of sale, inventory, reservations and guest facing apps into a single ecosystem, helping hotels, resorts, casinos and other venues run operations and personalize the guest experience across North America, Europe, Asia Pacific and India.

Operations: Agilysys generates about US$319.3m in revenue from software solutions for the global hospitality industry, with roughly US$277.8m from the United States and US$41.5m from international markets.

Market Cap: US$2.9b

Agilysys sits where cloud subscriptions, AI driven guest experiences and digital payments meet a hospitality sector that is steadily modernizing its tech stack, which is why investors looking at digital infrastructure should pay attention. The company is leaning into a SaaS model with recurring revenue, long term rollouts such as Marriott and a record implementation pipeline. It is also introducing AI modules focused on upselling, automation and revenue intelligence. At the same time, it remains tied to cyclical travel demand, carries lower gross margins than some software peers and relies heavily on external funding, which can matter when credit markets tighten and private lenders demand higher yields. The real question is how these strengths and pressure points stack up against each other for Agilysys.

Agilysys’ accelerating SaaS shift and AI modules suggest a story that revenue headlines alone do not capture, and the tension between growth and funding risk is particularly evident in the analyst forecasts for Agilysys

The three digital infrastructure stocks covered here are only a small sample of what private funding and data center demand are shaping, and the full Digital Infrastructure (Data Center) Stocks screener surfaces 44 more companies with equally compelling narratives across data centers, cloud hosting and related infrastructure. Use Simply Wall St to identify and analyze the specific catalysts, funding profiles and AI or cloud exposure that fit your view so you can focus on the highest conviction opportunities in this space.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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