Digital Realty: Scarce Power, Rising Demand, And A Long Growth Runway

Digital Realty Trust is rated Buy, leveraging scarce powered-campus assets and a global, interconnected platform to capture AI-driven data center demand. DLR’s record $1.6B contracted rent backlog, robust preleasing, and diversified product mix support 11% core FFO-per-share growth guidance for 2026. DLR’s development pipeline, power procurement, and private capital partnerships underpin forward growth, with fair value estimated at $205 per share. Key risks include project execution delays, cost inflation, and slower-than-expected core FFO growth, but the current backlog and renewal spreads provide visibility through 2027.

Digital Realty Trust, Inc. ( DLR ) is typically considered an easy proxy to follow to estimate AI-related infrastructure spending. However, we believe Digital Realty has a stronger case, given that it controls access to scarce, globally interconnected campus