Will Digital Realty’s (DLR) AI Collaboration with Dell and DXC Strengthen Its Customer Value Proposition?

• Digital Realty recently announced a collaboration with Dell Technologies and DXC, aimed at helping enterprises adopt and deploy private AI infrastructure using Dell’s AI Factory integrated within Digital Realty’s PlatformDIGITAL®, with DXC delivering operational management and implementation services.
• An interesting aspect of the collaboration is the provision of validated AI use cases and expert-led support, which may address significant barriers faced by businesses when deploying and scaling private AI initiatives.
• We'll explore how this integrated AI solution could strengthen Digital Realty's investment narrative through enhanced service offerings and customer value.

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Digital Realty Trust Investment Narrative Recap

To be a shareholder in Digital Realty Trust, you need to believe in the enduring demand for global data center capacity, particularly as enterprises accelerate AI and cloud infrastructure adoption. The recent collaboration with Dell Technologies and DXC brings enhanced private AI solutions, supporting the near-term catalyst of robust leasing activity; however, this development does not materially alter the main risk, potential oversupply in key U.S. markets if data center construction outpaces demand.

Among Digital Realty’s recent announcements, the launch of the Digital Realty Innovation Lab (DRIL) in September stands out as particularly relevant. This initiative allows enterprises to test AI and hybrid cloud workloads in real-world conditions, complementing the new Dell/DXC partnership by expanding the practical benefits of Digital Realty’s platform and supporting future leasing growth.

By contrast, investors should not overlook the risk that supply growth in key U.S. markets could start to exceed demand, especially as...

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

Digital Realty Trust is projected to generate $7.9 billion in revenue and $1.0 billion in earnings by 2028. This outlook is based on expected annual revenue growth of 11.5%, but also reflects a decrease in earnings of $0.3 billion from the current $1.3 billion.

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

Exploring Other Perspectives

Individual fair value estimates from the Simply Wall St Community range from US$110 to US$250, with three distinct perspectives included. While many see opportunity in Digital Realty’s backlog and new partnerships, the risk of supply outpacing demand in core markets could weigh on future returns; explore these differing views to inform your decisions.

Explore 3 other fair value estimates on Digital Realty Trust - why the stock might be worth 37% less 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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