Investors looking at REITs today face a clearer divide between traditional real estate and digital infrastructure than ever before. On one side stands Realty Income (O Quick QuoteO - Free Report) , a long-trusted name known for monthly dividends and its remarkably stable cash flows from a diverse mix of retail, industrial and service properties. Meanwhile, on the other side is Digital Realty (DLR Quick QuoteDLR - Free Report) , a global data center operator powering the backbone of cloud computing and artificial intelligence. 

Both bring scale, visibility and strong customer relationships, yet serve vastly different economic drivers. Realty Income anchors itself in essential, defensive industries where tenant turnover is low and leases are long. Digital Realty sits in the middle of one of the most powerful secular trends of this decade, the explosive growth of data, compute needs and AI workloads. 

With markets increasingly shaped by technological adoption and demographic spending patterns, choosing between these two REITs is ultimately choosing between stable income and growth tied to digital transformation. Let’s examine both these REITs to see which one offers a stronger long-term growth trajectory.

The Case for Realty Income

Realty Income has earned its reputation as one of the most durable and reliable REITs in the market. Its portfolio spans more than 15,500 properties across 92 industries, giving the company diversification that few peers can match. 

This breadth drives consistency. Occupancy typically sits near 98-99%, and its tenants include many of the most resilient categories in consumer-facing real estate, grocery, convenience stores, dollar stores, pharmacies and home improvement. These tenants provide stable rent coverage, contributing to steady revenue performance and cash flow visibility. 

In the third quarter of 2025, Realty Income generated healthy revenue growth, continued expanding its European footprint and executed selective dispositions that improved the portfolio mix. Its disciplined underwriting, data-driven predictive analytics and track record of reliable investment spreads continue to support its identity as a long-term income compounder. Also, the monthly dividend, now increased 133 times since listing, remains a defining element of the stock’s story.

Still, Realty Income’s upside profile is naturally more measured. Competition from private capital can make acquisitions less accretive, and certain retail subsectors require cautious credit monitoring. The company’s retail exposure also presents some vulnerability to tenant bankruptcies or trade-related disruptions. 

Its diversification, while stabilizing, limits exposure to fast-scaling industries that might accelerate growth. These constraints modestly temper near-term upside but don’t diminish the REIT’s core strength as a dependable performer through cycles.

The Case for Digital Realty

Digital Realty is positioned squarely at the heart of global AI and cloud expansion. Its platform of 300+ data centers supports hyperscalers, cloud providers, financial institutions and enterprises pursuing digital transformation. AI demand has become a defining catalyst. Since mid-2023, more than 50% of quarterly bookings have been tied to AI-oriented workloads. These deployments require specialized cooling, dense power delivery and low-latency connectivity, areas where Digital Realty already has considerable scale and capability.

In the third quarter of 2025, the company delivered 10% revenue growth, 13% FFO per share growth and record interconnection bookings, reflecting rising demand for real-time data exchange. Its global backlog now exceeds $850 million, offering strong forward revenue visibility.

DLR’s 5-gigawatt development runway positions it to meet rising GPU and AI inference needs. As enterprises shift more workloads from on-premise systems to hybrid cloud and AI environments, Digital Realty’s facilities are becoming critical infrastructure. Power constraints in major hubs give existing operators like DLR meaningful pricing power and customer stickiness. 

Its partnerships with renewable energy providers also strengthen its appeal to hyperscalers prioritizing sustainable compute. With growing demand for AI training, inference and data-intensive applications, DLR’s platform is aligned with one of the most durable and transformative technology trends globally.

However, DLR carries typical sector risks, capital-intensive development and exposure to hyperscaler spending cycles, but these challenges remain manageable relative to the strength of its demand drivers.

How Do Estimates Compare for Realty Income & Digital Realty?

The Zacks Consensus Estimate for Realty Income’s 2025 sales and funds from operations (FFO) per share implies year-over-year growth of 8.26% and 1.67%, respectively. While the consensus mark for O’s 2025 FFO per share has been revised southward, the same for 2026 has been tweaked northward over the past 60 days. 

For Realty Income:

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Digital Realty’s 2025 sales and FFO per share calls for year-over-year growth of 8.98% and 9.54%, respectively. What is also encouraging is that FFO per share estimates for 2025 and 2026 have been trending northward over the past 60 days.

For Digital Realty:

Image Source: Zacks Investment Research

Price Performance and Valuation of O & DLR

Year to date, Realty Income shares have risen 6.1%, while Digital Realty stock has declined 10%. However, both have underperformed the S&P 500 composite’s rise of 18.6% in the same time frame.

Image Source: Zacks Investment Research

O is trading at a forward 12-month price-to-FFO, which is a commonly used multiple for valuing REITs, of 12.84X. This is below its three-year median. 

Meanwhile, DLR is presently trading at a forward 12-month price-to-FFO of 20.26X, which is below its three-year median of 20.88X. However, both O and DLR carry a Value Score of D, signaling that they are not attractive at the current level.

Image Source: Zacks Investment Research

Conclusion: DLR Has the Edge

Realty Income remains unmatched in consistency, stability and income reliability, proving its value across decades of economic cycles. Yet, when assessing upside potential today, the growth clearly leans toward digital infrastructure rather than traditional net-lease real estate. Digital Realty is directly aligned with the explosive expansion of AI and cloud workloads, backed by record bookings, rising interconnection demand and a global development pipeline that positions it for multi-year growth. 

For investors seeking stronger long-term upside rather than purely dependable income, Digital Realty stands out as the more compelling REIT to consider right now. Estimate revisions also suggest that DLR stands out as the better REIT pick currently.

While DLR carries a Zacks Rank #2 (Buy), O has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.