Dallas, Texas-based Digital Realty Trust, Inc. (DLR) is a global real estate investment trust (REIT) that owns, develops, and operates data centers, providing colocation and interconnection services for cloud providers, enterprises, and tech companies. With over 300 facilities across 50+ metropolitan areas worldwide, DLR enables secure and scalable digital infrastructure needed for cloud computing, AI, 5G, and data-intensive services. The company is currently valued at a market cap of $53.7 billion,
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and DLR fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the REIT-specialty industry. Its diversified client base across industries and strong global presence position the company to benefit from the rising demand for digital storage and processing capacity.
Despite its notable strength, this specialty REIT has slipped 19.4% from its 52-week high of $194.22, reached on Nov. 29, 2024. Moreover, shares of DLR have declined 4% over the past three months, considerably lagging behind the Nasdaq Composite’s ($NASX) 10% rise during the same time frame.
In the longer term, DLR has dropped 18.6% over the past 52 weeks, underperforming NASX's 20.7% uptick over the same time period. Moreover, on a YTD basis, shares of DLR are down 17.8%, compared to NASX’s 21.3% surge.
To confirm its bearish trend, DLR has been trading below its 50-day and 200-day moving averages since the end of October.
On Oct. 23, Digital Realty delivered Q3 results, lifting its shares by 2.2% in the next trading session. Powered by higher rental revenues, total operating revenue grew 10.2% year-over-year to $1.6 billion, beating estimates by 3.9%. Core FFO climbed 13.2% to $1.89, well above analysts’ forecast of $1.78. Reflecting this solid performance, the company raised its fiscal 2025 core FFO per-share guidance to a range of $7.32 to $7.38.
DLR has outpaced its rival, Equinix, Inc. (EQIX), which declined 24.6% over the past 52 weeks and 22.9% on a YTD basis.
Despite DLR’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 29 analysts covering it, and the mean price target of $197 suggests a 25.9% premium to its current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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