Record Leasing And Demand Trends Will Fuel Future Data Center Expansion

Analysts have lifted the fair value estimate for Digital Realty Trust to $223.32 from $218.72, reflecting higher assumptions for revenue growth, profit margins, and future earnings multiples, supported by a broad wave of price target increases across the Street up to $240.

Analyst Commentary

Recent research updates on Digital Realty Trust show a clear tilt toward more positive views on execution, earnings power, and valuation support, even as some analysts flag trade offs versus peers and the need for continued delivery on growth plans.

Bullish Takeaways

• Bullish analysts highlight record Q2 results, with strength across key financial metrics and guidance. They see this as support for higher fair value assumptions and a wider range of price targets up to US$240.
• Several firms point to a larger backlog, described as about 30% of current revenues, along with firm pricing as support for expectations of strong core funds from operations growth over multiple years.
• Research notes cite accelerating hyperscale and AI driven demand, as well as new and existing hyperscale assets, as important for Digital Realty Trust's growth profile and potential earnings expansion.
• Coverage initiations and upgrades describe the existing portfolio of more than 300 data centers in Tier 1 markets, combined with an external development pipeline and access to power and land, as supportive of long term asset values and leasing economics.

Bearish Takeaways

• Some cautious analysts keep neutral or equal weight stances even while raising targets, indicating that valuation already reflects higher growth expectations for data center real estate investment trusts generally.
• HSBC research indicates a preference for Equinix over Digital Realty Trust, pointing to perceived advantages in retail data center leadership during the AI inference phase, which may limit relative upside for Digital Realty Trust in some investors' eyes.
• The more cautious views stress that the broader group is benefiting from strong hyperscale and enterprise AI demand. That makes sustained outperformance for any single stock, including Digital Realty Trust, dependent on consistent execution and disciplined capital deployment.
• Target increases are widespread but not uniform, which suggests some analysts still see execution risk around large future signings, development timing, and maintaining margin and FFO growth expectations already embedded in current models.

What’s in the News for Digital Realty Trust

• Digital Realty Trust operates 310 data centers worldwide with about 3.1 gigawatts of IT capacity and has roughly 8.5 gigawatts of buildable IT capacity under development across multiple continents, according to recent news reports.
• The company acquired approximately 1,440 acres at Astra Enterprise Park near Kansas City for around US$475 million in cash and operating partnership units, adding a large hyperscale and AI focused development site in a Top 30 U.S. metro. The site is supported by an Energy Service Agreement targeting up to 2 gigawatts of utility power at full delivery. Source DatacenterHawk and company disclosure.
• Digital Realty Trust raised its 2026 earnings guidance and now expects total revenue between US$6.85b and US$6.95b and net income per diluted share between US$3.10 and US$3.15, compared with prior ranges of US$6.65b to US$6.75b and US$2.65 to US$2.75 respectively.
• The company completed a follow on equity offering of common stock totaling about US$2.28b and has also filed an additional follow on equity offering of roughly US$2.35b in common stock, providing fresh equity capital for its data center growth plans.
• Digital Realty Trust launched the Digital Realty Innovation Lab in London and brought in ORCA Computing as a partner, giving customers a live testing environment for AI, quantum and high performance compute setups within a commercial data center setting. ORCA cites this as part of a broader collaboration network that includes NVIDIA, Toyota Tsusho, SiC Systems and JIJ.

Valuation Changes for Digital Realty Trust

• Fair value has risen slightly to $223.32 from $218.72, a change of about 2% in the updated model.
• The discount rate has moved slightly higher to 7.90% from 7.87%, which indicates a marginally higher required return in the valuation work.
• Revenue growth has been marked higher to 12.65% from 10.81%, which reflects stronger assumed top line expansion for Digital Realty Trust.
• Net profit margin has been raised to 15.06% from 11.70%, pointing to a higher expected share of revenue dropping to the bottom line.
• Future P/E has fallen meaningfully to 87.39x from 104.85x, which lowers the multiple applied to projected earnings in the updated fair value estimate.