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Digital Realty Trust Inc (DLR) Stock

Digital Realty Trust Inc Stock Details, Movements and Public Alerts

Digital Realty Trust (DLR): The $70 Billion Data Center Empire Powering Cloud and AI Infrastructure

Under CEO Andy Power's leadership since 2018, Digital Realty has evolved from colocation provider into a global platform interconnecting clouds, networks, and enterprises through PlatformDIGITAL®—proprietary software automating data center deployment and management. The company's customers read like a Who's Who of technology: Microsoft, AWS, Oracle, IBM, and Meta lease massive capacity for cloud regions and AI training clusters. Recent AI boom created unprecedented demand—hyperscale cloud providers need 50-100 megawatt facilities to power GPU-intensive workloads, driving Digital Realty's development pipeline to record $4 billion. Strategic acquisitions including Interxion (Europe) and Teraco (Africa) expanded global footprint serving data sovereignty requirements. Despite rising interest rates pressuring REIT valuations and massive capital requirements for AI-optimized facilities, Digital Realty's mission-critical infrastructure, long-term contracts (6-7 year average lease terms), and embedded rental escalators create predictable cash flows supporting a growing 3.2% dividend yield.

52-Week Range

$183.64 - $128.14

-15.92% from high · +20.49% from low

Avg Daily Volume

19

Latest volume

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

40.96

Above market average

Forward P/E

99.01

Earnings expected to decline

PEG Ratio

5.02

Potentially overvalued

Price to Book

2.45

EV/EBITDA

19.16

EPS (TTM)

$3.86

Price to Sales

9.51

Beta

1.12

Similar volatility to market

How is DLR valued relative to its earnings and growth?
Digital Realty Trust Inc trades at a P/E ratio of 40.96, which is above the market average of approximately 20. This premium valuation suggests investors expect above-average growth or the company has competitive advantages justifying the higher multiple. Looking ahead, the forward P/E of 99.01 is higher than the current P/E, indicating analysts expect earnings to decline over the next year. The PEG ratio of 5.02 indicates a premium valuation even accounting for growth.
What is DLR's risk profile compared to the market?
With a beta of 1.12, Digital Realty Trust Inc is roughly as volatile as the market, moving in line with broad market trends. This moderate beta suggests the stock offers market-level returns without excessive volatility. The price-to-book ratio of 2.45 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

24.00%

Operating Margin

13.30%

EBITDA

$2.66B

Return on Equity

5.83%

Return on Assets

1.07%

Revenue Growth (YoY)

11.10%

Earnings Growth (YoY)

60.30%

How profitable and efficient is DLR's business model?
Digital Realty Trust Inc achieves a profit margin of 24.00%, meaning it retains $24.00 from every $100 in revenue after all expenses. This is an impressive margin, indicating strong pricing power and efficient cost management that allows the company to generate substantial profits. The operating margin of 13.30% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 5.83% and ROA at 1.07%, the company achieves moderate returns on invested capital.
What are DLR's recent growth trends?
Digital Realty Trust Inc's revenue grew by 11.10% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings increased by 60.30% year-over-year, outpacing revenue growth through improved margins. These growth metrics should be evaluated against REIT - SPECIALTY industry averages for proper context.

Dividend Information

Dividend Per Share

$4.88

Dividend Yield

2.98%

Ex-Dividend Date

Dec 15, 2025

Dividend Date

Jan 16, 2026

What dividend income can investors expect from DLR?
Digital Realty Trust Inc offers a dividend yield of 2.98%, paying $4.88 per share annually. This above-average yield of 2-4% provides meaningful income while still allowing the company to reinvest for growth. It compares favorably to the S&P 500 average and offers competitive returns versus bonds in the current rate environment. To receive the next dividend, shares must be purchased before the ex-dividend date of Dec 15, 2025.
How reliable is DLR's dividend for long-term investors?
The dividend sustainability can be assessed through the payout ratio - Digital Realty Trust Inc pays $4.88 per share in dividends against earnings of $3.86 per share, resulting in a payout ratio of 100.00%. This very high payout exceeding 90% raises sustainability concerns, as nearly all earnings go to dividends. Any earnings decline could force a dividend cut. The next dividend payment is scheduled for Jan 16, 2026.

Company Size & Market

Market Cap

$55.3B

Revenue (TTM)

$5.84B

Revenue/Share (TTM)

$17.32

Shares Outstanding

343.50M

Book Value/Share

$64.99

Asset Type

Common Stock

What is DLR's market capitalization and position?
Digital Realty Trust Inc has a market capitalization of $55.3B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 343.50M shares outstanding, the company's ownership is relatively concentrated. As a participant in the REIT - SPECIALTY industry, it competes with other firms in this sector.
How does DLR's price compare to its book value?
Digital Realty Trust Inc's book value per share is $64.99, while the current stock price is $154.40, resulting in a price-to-book (P/B) ratio of 2.38. This reasonable premium to book value suggests the market values the company's earnings power and intangible assets appropriately. Most profitable companies trade between 1-3x book value. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$199.19

29.01% upside potential

Analyst Recommendations

Strong Buy

5

Buy

17

Hold

7

Sell

0

Strong Sell

1

How reliable are analyst predictions for DLR?
30 analysts cover DLR with 73% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The strong bullish consensus may already be priced in. The consensus target of $199.19 implies 29.0% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on DLR?
Current analyst recommendations:5 Strong Buy, 17 Buy, 7 Hold, 01 Strong Sell. The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Dec 13, 2025, 08:23 AM

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Digital Realty Trust (DLR) Stock Analysis 2025: Complete Investment Guide

When ChatGPT's explosive growth in late 2023 strained global compute capacity, Digital Realty emerged as a primary beneficiary—hyperscale cloud providers rushed to lease data center space for AI inference and training. For Andy Power, this validated years of strategic infrastructure investment anticipating compute-intensive workloads. With global data creation projected to reach 181 zettabytes by 2025 (up from 64 ZB in 2020), the secular tailwinds behind data center demand appear structural rather than cyclical. Investors seeking stable income from digital infrastructure increasingly view Digital Realty as essential equity allocation—the physical backbone enabling cloud computing, streaming, e-commerce, and now artificial intelligence at scale.

Business Model & Competitive Moat

Digital Realty operates as a REIT leasing data center space, power, and connectivity to enterprise customers (40% revenue), cloud and IT service providers (35%), and network operators (25%). The business model generates revenue through long-term leases (6-7 year average) with embedded 2-3% annual rent escalators, providing inflation protection. Digital Realty's competitive moats include scarce urban land near fiber connectivity hubs, power infrastructure (securing megawatts from utilities requires multi-year lead times), interconnection density (value increases with tenant proximity enabling direct connections), and customer switching costs (migrating data center operations creates months of disruption and millions in expense). Recent shift toward hyperscale leasing—100,000+ square foot facilities for single tenants—improves capital efficiency while concentrating risk. PlatformDIGITAL software layer adds margin through automation and creates vendor lock-in effects.

Financial Performance

  • •Revenue: $5.2 billion in 2024 with 8-10% annual growth driven by capacity expansion and rent escalators
  • •FFO: Funds from operations of $6.95/share growing 6-8% annually through leasing and development activity
  • •Occupancy: 88% utilized capacity with strong leasing momentum in AI-optimized facilities
  • •Dividend: $5.00/share annual payout (3.2% yield) with 15-year consecutive increase streak
  • •Leverage: Net debt 5.8x EBITDA, elevated but manageable given long-term contract visibility

Growth Catalysts

  • •AI Infrastructure Boom: Training large language models requiring 10-50x more compute than traditional workloads
  • •Cloud Migration: Enterprise hybrid/multi-cloud strategies driving colocation and interconnection demand
  • •5G Rollout: Edge computing requirements pushing data processing closer to end users (Digital Realty edge strategy)
  • •Data Sovereignty: International regulations mandating local data storage benefiting global footprint
  • •Development Pipeline: $4B committed projects generating 12-15% unlevered returns, expanding capacity 20%+

Risks & Challenges

  • •Interest Rate Sensitivity: As REIT, rising rates pressure valuations and increase refinancing costs on $20B debt
  • •Power Constraints: Utilities struggling to provide megawatts for massive AI facilities, limiting expansion in key markets
  • •Technology Obsolescence: Rapid chip efficiency gains could reduce space/power requirements, lowering demand growth
  • •Hyperscale Concentration: Top 20 customers represent 50%+ revenue—single contract loss materially impacts results
  • •Capital Intensity: $3-4B annual capex requirements necessitate equity issuance, diluting existing shareholders

Competitive Landscape

Digital Realty competes in the fragmented global data center market against Equinix (connectivity-focused colocation leader), hyperscale specialists (QTS, CyrusOne), and vertically integrated cloud providers building owned facilities (AWS, Google, Microsoft). Digital Realty differentiates through global scale (310 facilities vs. Equinix's 245), focus on wholesale/hyperscale deals complementing retail colocation, and PlatformDIGITAL software creating operational advantages. The competitive dynamic increasingly favors scale—only the largest operators can secure multi-hundred megawatt power commitments and finance billion-dollar development projects. Regional players face pressure to consolidate or exit, while hyperscale cloud providers represent both customers and potential competitors if they internalize more data center operations. Digital Realty's interconnection ecosystem (customers connect to each other within facilities) creates network effects that strengthen competitive position.

Who Is This Stock Suitable For?

Perfect For

  • ✓Income investors seeking 3.2% yield with growth and inflation protection via rent escalators
  • ✓Real estate portfolios wanting data infrastructure exposure beyond traditional property types
  • ✓Thematic investors betting on AI, cloud computing, and digital transformation secular trends
  • ✓Conservative growth investors prioritizing predictable cash flows and recession-resistant revenue

Less Suitable For

  • ✗High-yield seekers (3.2% yield modest vs. other REITs despite growth potential)
  • ✗Growth investors seeking high capital appreciation (REIT structure limits valuation expansion)
  • ✗Rate-sensitive investors uncomfortable with rising interest rate exposure
  • ✗ESG investors concerned about massive energy consumption and carbon footprint

Investment Thesis

Digital Realty merits a BUY rating for income-growth investors seeking stable cash flows with AI/cloud exposure. The stock's 3.2% dividend yield appears sustainable given 80% FFO payout ratio and visible long-term contract revenue. Andy Power's strategic positioning in hyperscale and AI-optimized facilities capitalizes on the most powerful secular growth drivers in technology. The REIT structure provides tax advantages (no corporate tax on distributed income) while limiting valuation multiples versus tech stocks. Near-term interest rate sensitivity creates volatility, but long-term infrastructure value proposition remains intact—data center demand grows structurally regardless of economic cycles. The $4B development pipeline converting to stabilized assets should drive 6-8% annual FFO growth supporting dividend increases. This is a core REIT holding for diversified portfolios seeking income with technology sector exposure minus single-company execution risk.

Conclusion

Position Digital Realty as 3-5% allocation in income-growth or real estate sleeves of diversified portfolios. The stock typically trades at 15-20x FFO—current valuation near historical average suggests fair pricing with modest upside. Consider accumulating on interest rate-driven selloffs when yield exceeds 3.5%, maintaining through operational execution periods. The AI infrastructure boom provides multi-year tailwind, though eventual normalization will test whether pricing power and contract terms justify premium valuations. Dividend growth trajectory (6-8% annually) plus yield creates attractive total return potential for patient, income-focused investors.
Bull Case
$195 (30% upside)
Base Case
$165 (10% upside)
Bear Case
$130 (13% downside)

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