We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Digital Realty Stock Rallies 18% in 3 Months: Will the Momentum Last?
Read MoreHide Full Article
Key Takeaways
DLR shares jumped 18% in three months, far outpacing the industry's 3.7% growth.
Digital Realty benefits from rising cloud, AI and data demand, with $175M of new leases signed in Q4 2025.
DLR is expanding globally with Portugal and Bulgaria data center deals and a large development pipeline.
Digital Realty (DLR - Free Report) shares have risen 18% in the past three months compared with the industry’s 3.7% growth.
The company is well-poised to gain from its unmatched global footprint of data centers with growing digital transformation, cloud computing and the proliferation of artificial intelligence. A diverse tenant base assures stable revenues. Accretive buyouts and investments in land and infrastructure globally and a robust development pipeline, bode well for long-term growth. A solid balance sheet with ample liquidity will aid future expansion.
Early this month, DLR entered Portugal with the acquisition of a data center in Lisbon, marking another step in its strategy to expand across fast-growing digital infrastructure markets.
Analysts seem positive about this Zacks Rank #3 (Hold) company, with the Zacks Consensus Estimate for its 2026 funds from operations (FFO) per share revised marginally northward to $7.96 over the past month.
Image Source: Zacks Investment Research
Factors Behind DLR Stock’s Price Surge: Will This Continue?
With the growth of the Internet of Things and Big Data, and an increasing number of companies opting for third-party IT infrastructure, data center REITs like Digital Realty are experiencing a booming market. Demand is strong in top-tier data center markets, and despite enjoying high occupancy, these markets are absorbing new construction at a faster pace. In the fourth quarter of 2025, the company signed $175 million of new leases, including a $77 million of 0-1-megawatt leases and $19 million of interconnection bookings.
Digital Realty has a high-quality, diversified customer base comprising tenants from cloud, content, information technology, network, other enterprise and financial industries. It has a global presence, with 310 data centers in more than 50 metros with decent occupancy. The majority of the tenants are investment-grade, and numerous customers use multiple locations across the portfolio. This assures stable revenue generation for the company.
Digital Realty is expected to ride on its growth curve, backed by strategic investments in land, infrastructure and acquisitions. In March 2026, Digital Realty expanded into Bulgaria through the acquisition of Telepoint, a highly connected interconnection hub in Sofia. The deal adds two data centers to its portfolio and strengthens its presence in Southeast Europe. Such expansionary efforts will bring in future revenue growth for the company.
DLR is undertaking efforts to enhance its portfolio by carrying out various development and redevelopment activities. As of Dec. 31, 2025, it had 9.7 million square feet of space under active development and 4.7 million square feet of space held for future development. For 2026, the company expects to incur capital expenditures for its development activities (net of partner contributions) in the range of $3.25-$3.75 billion.
Digital Realty has a solid balance sheet with ample liquidity. The company exited the first quarter of 2025 with cash and cash equivalents of $3.45 billion. Its net debt-to-adjusted EBITDA was 4.9X, while its fixed charge coverage was 4.5X as of the end of the fourth quarter of 2025. Digital Realty currently enjoys BBB (Stable Outlook), BBB (Stable Outlook) and Baa2 (Stable Outlook) credit ratings from Fitch, S&P and Moody's, respectively, which provide it with favorable access to the debt market and lower borrowing costs.
Key Risks for DLR Stock
Competition from other industry players is likely to lead to aggressive pricing pressure and weigh on Digital Realty’s prospects. A substantial debt burden and high interest rates add to its woes.
The Zacks Consensus Estimate for CLDT’s 2026 FFO per share is pegged at $1.20, which indicates year-over-year growth of 17.7%.
The Zacks Consensus Estimate for CUZ’s full-year FFO per share is pinned at $2.93, which calls for an increase of 3.2% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Shutterstock
Digital Realty Stock Rallies 18% in 3 Months: Will the Momentum Last?
Key Takeaways
Digital Realty (DLR - Free Report) shares have risen 18% in the past three months compared with the industry’s 3.7% growth.
The company is well-poised to gain from its unmatched global footprint of data centers with growing digital transformation, cloud computing and the proliferation of artificial intelligence. A diverse tenant base assures stable revenues. Accretive buyouts and investments in land and infrastructure globally and a robust development pipeline, bode well for long-term growth. A solid balance sheet with ample liquidity will aid future expansion.
Early this month, DLR entered Portugal with the acquisition of a data center in Lisbon, marking another step in its strategy to expand across fast-growing digital infrastructure markets.
Analysts seem positive about this Zacks Rank #3 (Hold) company, with the Zacks Consensus Estimate for its 2026 funds from operations (FFO) per share revised marginally northward to $7.96 over the past month.
Image Source: Zacks Investment Research
Factors Behind DLR Stock’s Price Surge: Will This Continue?
With the growth of the Internet of Things and Big Data, and an increasing number of companies opting for third-party IT infrastructure, data center REITs like Digital Realty are experiencing a booming market. Demand is strong in top-tier data center markets, and despite enjoying high occupancy, these markets are absorbing new construction at a faster pace. In the fourth quarter of 2025, the company signed $175 million of new leases, including a $77 million of 0-1-megawatt leases and $19 million of interconnection bookings.
Digital Realty has a high-quality, diversified customer base comprising tenants from cloud, content, information technology, network, other enterprise and financial industries. It has a global presence, with 310 data centers in more than 50 metros with decent occupancy. The majority of the tenants are investment-grade, and numerous customers use multiple locations across the portfolio. This assures stable revenue generation for the company.
Digital Realty is expected to ride on its growth curve, backed by strategic investments in land, infrastructure and acquisitions. In March 2026, Digital Realty expanded into Bulgaria through the acquisition of Telepoint, a highly connected interconnection hub in Sofia. The deal adds two data centers to its portfolio and strengthens its presence in Southeast Europe. Such expansionary efforts will bring in future revenue growth for the company.
DLR is undertaking efforts to enhance its portfolio by carrying out various development and redevelopment activities. As of Dec. 31, 2025, it had 9.7 million square feet of space under active development and 4.7 million square feet of space held for future development. For 2026, the company expects to incur capital expenditures for its development activities (net of partner contributions) in the range of $3.25-$3.75 billion.
Digital Realty has a solid balance sheet with ample liquidity. The company exited the first quarter of 2025 with cash and cash equivalents of $3.45 billion. Its net debt-to-adjusted EBITDA was 4.9X, while its fixed charge coverage was 4.5X as of the end of the fourth quarter of 2025. Digital Realty currently enjoys BBB (Stable Outlook), BBB (Stable Outlook) and Baa2 (Stable Outlook) credit ratings from Fitch, S&P and Moody's, respectively, which provide it with favorable access to the debt market and lower borrowing costs.
Key Risks for DLR Stock
Competition from other industry players is likely to lead to aggressive pricing pressure and weigh on Digital Realty’s prospects. A substantial debt burden and high interest rates add to its woes.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Chatham Lodging Trust REIT (CLDT - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Cousins Properties (CUZ - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CLDT’s 2026 FFO per share is pegged at $1.20, which indicates year-over-year growth of 17.7%.
The Zacks Consensus Estimate for CUZ’s full-year FFO per share is pinned at $2.93, which calls for an increase of 3.2% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.