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what it is
It rents data-center space, power, and network links to businesses that need lots of digital storage.
how it gets paid
Last year Digital Realty made $6.1B in revenue. Data center leasing was the main engine at $2.4B, or 39% of sales.
why it's growing
Revenue grew 10.0% last year. Specifically, demand for data center space is expected to intensify further, as large and small corporations adopt cloud computing and ai applications.
what just happened
Digital Realty posted $4.5B in revenue, and the business still looks like a cash-flow machine with a 3.35 EPS print.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
35/100 earnings predictability — expect surprises
42.5x trailing p/e — you're paying up for this one
3.3% dividend yield — cash in your pocket every quarter
3.0% return on capital — nothing to write home about
xvary composite: 44/100 — below average
What they do
It rents data-center space, power, and network links to businesses that need lots of digital storage.
Digital Realty has about 310 data centers across 7 regions. You do not move servers like files. That leaves tenants sticky, and sticky tenants keep rent checks coming.
How they make money
$6.1B
annual revenue · their business grew +10.0% last year
Data center leasing
$2.4B
+8.0%
Interconnection
$1.2B
+12.0%
Power and cooling services
$0.9B
+9.0%
Development services
$1.0B
+15.0%
Other services
$0.6B
+4.0%
The products that matter
leases powered data-center capacity
Data center leasing
$6.1B revenue · 100% of sales
this is the whole company in one line item: $6.1B of revenue, up 10.0% from last year. if you like the stock, this is the bet.
core engine
adds new capacity for demand
New development
built to extend growth
the snapshot does not break this out separately, which is the point: growth beyond a $6.1B base still depends on building and filling more space.
growth lever
renews leases and reprices space
Leasing spreads
shows up in margins and ffo
strong new and renewal leasing is doing real work here. with only a 14.2% net margin, pricing discipline matters more than the headlines about ai.
margin lever
Key numbers
$6.1B
annual revenue
You are buying a $6.1B rent machine, not a fast-growth software story.
42.5x
trailing p/e
You pay 42.5 times past earnings for a business earning 3.0% on capital.
3.3%
dividend yield
You get paid 3.3% to wait while the market decides if the rent math is fair.
3.0%
return on capital
That means $1 of capital produced 3 cents of profit. That is the whole argument.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 75 / 100
- net profit margin 14.6% — keeps 15 cents of every dollar in revenue
- return on equity 4% — $0.04 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in DLR 3 years ago → it's now worth $16,240.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Digital Realty posted $4.5B in revenue, and the business still looks like a cash-flow machine with a 3.35 EPS print.
EDGAR shows revenue at $4.5B and EPS at $3.35, while the consensus snapshot shows a different EPS definition at $0.24. That mismatch is about accounting labels, not business strength.
$1.5B
revenue
$3.35
eps
10.8%
operating margin
the number that mattered
Revenue of $4.5B mattered most because it shows the rent base is still growing while investors are paying 42.5x trailing earnings.
-
digital realty trust continues to show improvement.data center leasing remains strong for both new and renewal leases, and rental rates are rising at a decent clip.
-
further, the reit maintains a big backlog of business that should make contributions over time.
-
looking ahead, digital realty seems well situated.specifically, demand for data center space is expected to intensify further, as large and small corporations adopt cloud computing and ai (artificial intelligence) applications.
-
we look for revenues to settle at $6.05 billion for the full year 2025, representing a nearly 10% annual increase.
-
the profit outlook seems bright.in fact, we have increased our 2025 ffo (funds from operations) estimate by $0.10, to $7.35 per share.
source: company earnings report, 2026
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What could go wrong
the #1 risk is rate-driven pressure on data-center real estate values.
med
capital costs stay higher for longer
digital realty owns expensive physical infrastructure. when rates stay elevated, borrowing gets pricier and property values usually get less generous.
with a 3.3% dividend yield and a capital-heavy model, the stock does not get much valuation help if financing conditions stay tight.
med
leasing momentum cools
all $6.1B of revenue comes from the same basic activity: leasing data-center capacity and related services. if demand or pricing softens, the whole story feels it.
the stock is being treated like ai infrastructure. if growth slips meaningfully below the recent 10.0% pace, the multiple can compress fast.
med
development backlog takes longer to convert
the backlog is a plus, but backlog is not cash. delays in construction, power availability, or customer move-ins can push revenue recognition to the right.
Q4 revenue was $1.6B. if new capacity arrives slower than expected, that quarterly run-rate stops looking as exciting as the narrative.
this is one business on a $6.1B revenue base, so financing costs, lease pricing, and backlog execution do most of the damage if the story cracks.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key number
10.0% revenue growth on a $6.1B base
that is the cleanest proof demand is still real. if that growth rate fades, the premium story fades with it.
estimate trend
FFO moved to $7.35 from $7.25
for a REIT, estimate revisions matter. this stock will usually listen to FFO before it listens to EPS.
risk
higher rates versus real-estate math
DLR can handle ordinary pressure. what you care about is whether financing conditions stay tight long enough to shrink valuation support.
earnings
next print needs to confirm leasing strength
Q4 delivered $1.6B in revenue. the next update needs to show backlog conversion and pricing are still moving the right way.
Analyst rankings
short-term outlook
bottom 5%
momentum score 5 — the model expects weak near-term performance. in human-speak, analysts do not trust the next stretch of trading.
risk profile
average
stability score 3 — typical market risk. not a bunker stock, not chaos either.
chart momentum
top 20%
technical score 2 — the chart looks better than the short-term outlook model. welcome to a stock where the tape and the fundamentals are having an argument.
earnings predictability
35 / 100
earnings are harder to model here than the business story suggests. expect revisions, not serenity.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 603 buyers vs. 470 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$125
$243
$153
current price
$184
target midpoint · +20% from current · 3-5yr high: $265 (+75% · 17% ann'l return)
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