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1. Company Snapshot

1.a. Company Description

Digital Realty supports the world's leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions.PlatformDIGITALR, the company's global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture PDxTM solution methodology for scaling digital business and efficiently managing data gravity challenges.Digital Realty's global data center footprint gives customers access to the connected communities that matter to them with more than 284 facilities in 48 metros across 23 countries on six continents.

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1.b. Last Insights on DLR

Digital Realty Trust, Inc.'s recent performance faces challenges from rising competition and debt pressures. The company's expanding development pipeline and new collaborations, such as with NVIDIA, are growth drivers, but increasing debt levels and competition may hinder progress. Avalon Trust Co's 52.9% stake reduction and mixed institutional investor activity may also impact the stock. Additionally, the company's €600 million and €800 million guaranteed notes issuances due in 2033 and 2037, respectively, may affect its capital structure.

1.c. Company Highlights

2. Digital Realty's Q3 2025 Earnings: A Strong Performance

Digital Realty reported a robust third-quarter 2025 earnings, with core FFO per share reaching a quarterly record of $1.89, up 13% year-over-year, exceeding analyst estimates of $1.78. Adjusted EBITDA rose 14% year-over-year, driven by strong commencements, releasing spreads, and fee income. The company's financial performance was further bolstered by a significant increase in bookings, totaling $201 million at 100% share, with $85 million from 0-1 megawatt plus interconnection product. AI-oriented deployments accounted for more than 50% of quarterly bookings since mid-2023, and 50% of bookings in Q3 were AI-related.

Publication Date: Oct -24

📋 Highlights
  • Record Core FFO Growth:: Core FFO per share reached $1.89, up 13% YoY, with constant currency at $1.85 (+11%).
  • AI-Driven Bookings:: 50% of Q3 bookings ($100.5M) were AI-related, reflecting sustained demand since mid-2023.
  • Expanded Development Pipeline:: $9.7B gross pipeline at 11.6% expected stabilized yield, with 50MW of new capacity (85% pre-leased) delivered in 2025.
  • Debt Management & Guidance:: Full-year core FFO guidance raised by 2% to $7.32–$7.38/share (midpoint ~10% YoY growth), with $1.3B debt maturing in 2026.
  • Sustainability Commitments:: 500 GWh clean hydro power agreement with Current Hydro and EcoVadis Gold rating expansion in Illinois.

Operational Highlights

The company's operational performance was marked by accelerated organic growth, with 8% same-capital cash NOI growth year-over-year. Digital Realty's gross data center development pipeline stood at $9.7 billion at an 11.6% expected stabilized yield. The company delivered about 50 megawatts of new capacity, 85% of which was pre-leased. As per Andy Power, "We have a strong global full-spectrum platform with a backlog of 20% of data center revenue. Our pipeline is at a record level, positioning us for better long-term sustainable growth."

Guidance and Outlook

Digital Realty increased its full-year guidance and expects to begin 2026 with significant momentum. The company is targeting 10% top-line growth in 2026 and has a strong backlog of over $550 million. However, there are some headwinds, including $1.3 billion of debt maturing in January 2026 at 2.5% and lower interest income due to expected rate cuts.

Valuation

With a P/E Ratio of 43.73 and EV/EBITDA of 20.05, the market seems to be pricing in a significant growth premium. The company's ROE of 6.32% and ROIC of -26.72% indicate that while it is generating returns, it is not creating value through its investments. Analysts estimate next year's revenue growth at 11.1%, which may justify the premium valuation.

Future Plans

Digital Realty is focused on executing its strategy to deliver capacity to customers and maintain financial discipline to drive long-term value for stakeholders. The company expects to spend more in 2026, with a slight increase in CapEx, and is considering various funding options, including private capital groups and balance sheet liquidity. With 5 gigawatts of future developable capacity, the company is well-positioned to meet growing demand, particularly for AI and high-performance computing.

3. NewsRoom

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Groupe la Francaise Has $4.28 Million Position in Digital Realty Trust, Inc. $DLR

Dec -04

Source: defenseworld.net

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Digital Realty Announces Redemption of 2.500% Guaranteed Notes due 2026

Dec -03

Source: globenewswire.com

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AI needs power desperately. Here's how to invest in companies profiting from the pain.

Dec -03

Source: marketwatch.com

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3 Dirt Cheap Dividend Stocks to Buy and Hold

Dec -02

Source: fool.com

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SoftBank’s 40% Slide Raises New Questions About the AI Capital Cycle

Dec -02

Source: 247wallst.com

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2 AI Darlings Everyone Loves Today — And Will Panic-Sell Tomorrow

Dec -02

Source: 247wallst.com

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Should You Retain Digital Realty Stock in Your Portfolio Now?

Dec -01

Source: zacks.com

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Doves Take The Wheel

Nov -30

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

REIT - Commercial

Expected Growth: 5.5%

Demand for data center and cloud computing infrastructure drives growth in commercial properties. Digital Realty Trust's strategic acquisitions and development of high-quality assets also contribute to growth

7. Detailed Products

Colocation

Secure, reliable, and scalable data center solutions for housing IT infrastructure

Interconnection

Direct, secure, and low-latency connectivity to cloud and network providers

Cloud and Hybrid IT

Seamless integration of on-premises infrastructure with cloud and hybrid IT solutions

Managed Services

Comprehensive management and monitoring of IT infrastructure and applications

Data Center Solutions

Customized data center solutions for specific business needs

Real Estate Services

Acquisition, development, and management of data center properties

8. Digital Realty Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Digital Realty Trust, Inc. faces moderate threat from substitutes due to the availability of alternative data center solutions and cloud services.

Bargaining Power Of Customers

Digital Realty Trust, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Digital Realty Trust, Inc. has a strong bargaining position with its suppliers due to its large scale of operations and long-term contracts.

Threat Of New Entrants

The high barriers to entry in the data center industry, including high capital expenditures and regulatory hurdles, make it difficult for new entrants to compete with Digital Realty Trust, Inc.

Intensity Of Rivalry

The data center industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.16%
Debt Cost 3.95%
Equity Weight 49.84%
Equity Cost 6.76%
WACC 5.35%
Leverage 100.63%

11. Quality Control: Digital Realty Trust, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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VICI Properties

A-Score: 7.6/10

Value: 5.0

Growth: 7.7

Quality: 8.1

Yield: 10.0

Momentum: 5.0

Volatility: 10.0

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Postal Realty Trust

A-Score: 7.4/10

Value: 4.3

Growth: 6.8

Quality: 6.9

Yield: 10.0

Momentum: 7.0

Volatility: 9.7

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Simon Property Group

A-Score: 6.1/10

Value: 2.1

Growth: 3.9

Quality: 6.5

Yield: 9.0

Momentum: 6.0

Volatility: 9.3

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Public Storage

A-Score: 5.9/10

Value: 2.1

Growth: 5.8

Quality: 7.3

Yield: 8.0

Momentum: 2.5

Volatility: 9.7

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Digital Realty Trust

A-Score: 5.5/10

Value: 2.4

Growth: 3.6

Quality: 5.9

Yield: 7.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Iron Mountain

A-Score: 5.2/10

Value: 4.7

Growth: 4.1

Quality: 4.2

Yield: 7.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

164.73$

Current Price

164.73$

Potential

-0.00%

Expected Cash-Flows