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Does Dual AI-Focused Buy Initiations Transform the Bull Case For Digital Realty Trust (DLR)?

Simply Wall St · 3d ago
  • In early January 2026, Deutsche Bank and Goldman Sachs both initiated coverage on Digital Realty Trust with Buy ratings, emphasizing AI-related demand, lease renewal opportunities, and the company’s sizeable development pipeline as key supports for long-term data center growth.
  • This twin endorsement from major investment banks reinforces Digital Realty’s role as an infrastructure “picks and shovels” provider for AI and cloud computing, highlighting how its existing backlog and future capacity plans underpin that theme.
  • Now, we’ll examine how these new Buy ratings, anchored in AI-driven data center demand, may reshape Digital Realty’s existing investment narrative.

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Digital Realty Trust Investment Narrative Recap

To own Digital Realty Trust, you need to believe that AI, cloud and broader digital infrastructure demand will keep filling its data centers and supporting its large development pipeline. The new Buy ratings from Deutsche Bank and Goldman Sachs lean into that thesis, but they do not materially change the near term focus on converting its record lease backlog while managing financing and interest rate risk.

The most relevant announcement here is Digital Realty’s upcoming Q4 2025 results on 5 February 2026, which will give investors a clearer view on leasing trends, backlog conversion and capital costs. Against the backdrop of bullish coverage tied to AI demand, that earnings update is a key checkpoint on whether expected data center revenue growth and profitability are tracking closely with the AI driven narrative.

Yet investors also need to be aware that higher or more volatile interest rates could still...

Read the full narrative on Digital Realty Trust (it's free!)

Digital Realty Trust's narrative projects $7.9 billion revenue and $1.0 billion earnings by 2028. This requires 11.5% yearly revenue growth and an earnings decrease of about $0.3 billion from $1.3 billion today.

Uncover how Digital Realty Trust's forecasts yield a $197.78 fair value, a 26% upside to its current price.

Exploring Other Perspectives

DLR 1-Year Stock Price Chart
DLR 1-Year Stock Price Chart

Three members of the Simply Wall St Community currently value Digital Realty between US$110.45 and US$242.29, reflecting a wide spread of expectations. When you set those views against the importance of converting Digital Realty’s record lease backlog into revenue, it underlines how differently people weigh growth potential and execution risk, and why it helps to compare several independent opinions before making a decision.

Explore 3 other fair value estimates on Digital Realty Trust - why the stock might be worth as much as 55% more than the current price!

Build Your Own Digital Realty Trust Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.