Digital Realty Earnings: Data Points Support How Attractive Firm’s Properties Are in a Digital Era

Digital Realty is still transitioning its data center portfolio to focus more on its highly connected campuses that can provide all the options customers want in an increasingly data-centric and connected world, which will be even more critical if and when artificial intelligence, or AI, becomes more widely used. The firm continues to see very strong demand and pricing, and it is selling data centers that are not strategic or connected to campuses. Sales growth remains strong, and we expect profits will follow as the transition to the higher-quality portfolio continues. Nothing disclosed in the quarter leads us to adjust our forecast, and we’re maintaining our $135 fair value estimate.