Digital Realty Trust: Frozen Dividends Meet Twice Raised Guidance - Buy With Caveats

Digital Realty Trust's growing backlog to $1.9B and the rich increases on renewal leases by +25.4% underscore their ability to capitalize on the multi-year AI compute demand. The same has been observed in the twice raised FY2026 guidance and the double-digit growth target through 2028, as new commencements accelerate. DLR remains compelling at a Price/FFO of 24.26x, while offering an excellent upside potential to my LTPT of $243.30, albeit with underwhelming, frozen dividends. Risks include capex/funding risks at at time of uncertain macroeconomic environment and the overbought technicals post the FQ2'26 earnings call rally. DLR may be a better Buy after a slight correction to the 50/100/200 DMAs, as the data center sector enters the softer trading months through October.

I previously reiterated my Buy rating for Digital Realty Trust, Inc. ( DLR ) in April 2026 after a moderate correction, given the overly done stock price rally from the December 2025 bottom. In this article, I shall