Digital Realty Trust (DLR): Assessing Valuation After Upbeat Q3 Results and Expanded NVIDIA AI Partnership

Digital Realty Trust (DLR) turned heads after its latest quarterly report showed revenue growth beating forecasts and a raised outlook for next year. The company’s expanding collaboration with NVIDIA on AI infrastructure is also drawing attention.

See our latest analysis for Digital Realty Trust.

Digital Realty Trust’s recent collaboration with NVIDIA and announcements of regular dividends have arrived as the company steadies itself after a flat patch, with its 1-year total shareholder return still hovering just below break-even at -3.9%. While year-to-date share price momentum has faded slightly, a robust 69% total return over three years points to significant long-term value creation, even amid market fluctuations.

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With shares still trading at a discount to analyst targets despite upbeat earnings and new AI partnerships, is Digital Realty Trust a bargain for forward-looking investors, or has the market already accounted for these growth catalysts?

Most Popular Narrative: 14.7% Undervalued

Current sentiment points to Digital Realty Trust trading well below the perceived fair value of $199.19, with the last closing price at $169.89. This gap suggests optimism around the company’s prospects and highlights the catalysts that underpin these expectations.

Digital Realty's record backlog of leases, which have not yet commenced, indicates strong future revenue potential and earnings growth due to steady demand for data center capacity, particularly from AI and cloud service providers.

Read the complete narrative.

Want to peek inside the calculations that power this fair value? The narrative is built on blockbuster leasing wins and a future profit model that challenges category norms. Ready to unravel the bold assumptions driving this bullish valuation? Cracking open the full narrative may surprise even seasoned investors.

Result: Fair Value of $199.19 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, supply could outpace demand in key U.S. markets, and rising interest rates may weigh on Digital Realty Trust’s future profitability.

Find out about the key risks to this Digital Realty Trust narrative.

Build Your Own Digital Realty Trust Narrative

If you see things differently or want to dig into the details yourself, crafting your own perspective takes less than three minutes. Do it your way.

A great starting point for your Digital Realty Trust research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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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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