DLR Stock Forecast & Price Target

Digital Realty Trust is positioned to benefit from record data center demand, especially as AI and cloud workloads drive strong hyperscale and enterprise leasing across its 300 properties in 57 metropolitan areas. The company’s $1.8 billion backlog, recent ~$208 million 2Q26 leasing, and record $108.3 million in interconnection bookings support visibility into multi-year Core FFO growth, while 63% of its development pipeline is already pre-leased. Its scarcity value is reinforced by supply constraints in key markets, rising build costs, improving renewal spreads, and a multi-year low leverage ratio of 4.7x that preserves financial flexibility for growth.

Digital Realty Trust is exposed to several fundamental headwinds that support a negative outlook, including heavy reliance on third parties for power, which could constrain existing operations and future growth if supply is insufficient or unstable. It also faces intense global competition from EQIX, NTT, and regional operators, creating the risk that capacity goes unleased or must be priced less favorably, while its top 20 customers account for just over half of the business, heightening revenue concentration risk. Lower hyperscale and enterprise capex tied to AI/cloud data center investment, alongside valuation multiples that exceed peers, further weakens the risk-reward profile despite its 300 properties across 57 metropolitan areas in 31 countries.