Update shared on 22 Nov 2025
Analysts have raised their price target for Digital Realty, increasing it in line with improved guidance and a robust demand outlook. They cited recent record pipelines and the stock’s renewed valuation appeal.
Analyst Commentary
Recent comments from analysts highlight key drivers and concerns shaping the outlook for Digital Realty Trust following its improved guidance and updated price targets.
Bullish Takeaways
- Bullish analysts noted the company delivered record demand pipelines, which supports the potential for continued robust growth in leasing and occupancy rates.
- The predictable growth business model of Digital Realty is viewed as compelling, particularly given the less employment-sensitive characteristics of data centers compared to other sectors.
- Recent valuation consolidation is seen as making the shares more attractive, especially for investors seeking stability in a slower macroeconomic environment.
- Management's successful conversations with customers in key markets, such as Charlotte, reinforce confidence in the company's ability to capture new opportunities and expand its market presence.
Bearish Takeaways
- Some analysts caution that despite overall upside results, there were slight disappointments in leasing activity, which could signal shorter-term execution risks.
- The updated guidance, while positive, highlights the need for sustained delivery on strong pipelines to achieve projected growth rates.
- Maintaining a Hold rating by select analysts suggests that while valuation has improved, long-term upside may be tempered by near-term operational challenges or uncertainties in broader macro conditions.
What's in the News
- Two major data centers developed by Digital Realty and Stack Infrastructure in Santa Clara, California, remain unpowered and may sit empty for years due to delays from the local utility (Bloomberg).
- Digital Realty announced expanded collaboration with NVIDIA to develop next-generation AI infrastructure at its Northern Virginia campus. The initiative includes support for NVIDIA's new AI Factory Research Center as well as advanced cooling and power management technologies.
- Digital Realty introduced its data center innovation lab at the Northern Virginia campus, providing a real-world environment for partners and customers to test and optimize AI and hybrid cloud deployments before scaling.
- The company has raised its 2025 earnings and revenue guidance, reflecting strong operational confidence and growth expectations.
- A strategic partnership has been launched with Dell Technologies and DXC to simplify and accelerate enterprise AI deployments by directly connecting customers with comprehensive AI solutions and operational management expertise.
Valuation Changes
- Fair Value: Remains unchanged at $199.19, reflecting stable assessment despite other updates.
- Discount Rate: Increased slightly from 7.81% to 7.83%, indicating a modest adjustment in risk assumptions.
- Revenue Growth: Projected growth rate has risen marginally from 12.95% to 12.96%.
- Net Profit Margin: Improved slightly from 13.89% to 13.93%, reflecting enhanced profitability expectations.
- Future P/E Ratio: Decreased from 81.35x to 77.52x, which suggests improved valuation attractiveness based on forward earnings.
Disclaimer
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