How Expansion and AI Leasing Momentum at Digital Realty Trust (DLR) Has Changed Its Investment Story

• At the recent Global Communications Infrastructure Conference, Digital Realty Trust outlined its expansion into Charlotte, Atlanta, and select Asian markets, as well as detailed efforts to address power supply challenges and manage a significant US$850 million backlog.
• An interesting insight from the company's presentation is the ongoing strength in AI-driven leasing demand, which is underpinning expectations for a 6.5% increase in funds from operations per share in 2025 despite regional infrastructure hurdles.
• We’ll explore how Digital Realty’s focus on meeting AI workload demand and capacity expansion could affect its growth narrative.

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Digital Realty Trust Investment Narrative Recap

To be a shareholder in Digital Realty Trust, you need to believe in the ongoing expansion of global data infrastructure and the ability to monetize AI-driven demand despite complex regional challenges and industry competition. The most recent conference reaffirmed AI workload strength as a key short-term catalyst, while highlighting power availability as the biggest near-term risk; the news largely reinforces, rather than changes, these dynamics for now.

One of the most relevant announcements is Digital Realty's collaboration with Dell Technologies and DXC, targeting enterprise AI solutions and private AI use cases. This development underscores Digital Realty's push to capture incremental leasing and accelerate backlog realization as AI demand shapes the sector’s growth prospects over the next several years.

Yet, it’s important to note that, despite robust expansion plans, certain constraints on regional power supply could lead to...

Read the full narrative on Digital Realty Trust (it's free!)

Digital Realty Trust's narrative projects $7.9 billion revenue and $1.0 billion earnings by 2028. This requires 11.5% yearly revenue growth and a $0.3 billion decrease in earnings from $1.3 billion today.

Uncover how Digital Realty Trust's forecasts yield a $195.44 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Three recent fair value estimates from the Simply Wall St Community range between US$110.45 and US$249.41. Some see robust AI-driven leasing as a boost, but concerns about supply and power constraints may shape future performance, so review multiple viewpoints before making conclusions.

Explore 3 other fair value estimates on Digital Realty Trust - why the stock might be worth as much as 44% more than the current price!

Build Your Own Digital Realty Trust Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Digital Realty Trust research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Digital Realty Trust's overall financial health at a glance.

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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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