Digital Realty stock holds above $190 as AI data center demand drives record leasing and guidance raise

Digital Realty Trust, Inc. stock (ISIN US2538681030) is trading at $190.81 as of the August 21, 2026 session, supported by strong second quarter 2026 leasing momentum and higher full-year funds from operations guidance in an AI-driven data center market.

The company recently reported core funds from operations of $2.65 per share for the second quarter of 2026 and core FFO excluding net promote income of $2.13 per share, a 14 percent increase compared with the same period a year earlier. Investors have responded to this growth and updated outlook with fresh institutional buying and a consensus view that still sees upside from current levels.

For investors, the combination of accelerating AI infrastructure demand, double-digit FFO growth, and a rising backlog gives Digital Realty a more visible cash flow trajectory into late 2026.

Leasing surge lifts 2026 outlook

In its second quarter 2026 update, Digital Realty raised its full-year 2026 core FFO outlook excluding net promote to a range of $8.15 to $8.20 per share after posting $2.13 per share on that basis in the quarter, which implies that management expects per-share FFO to grow further over the remainder of the year. This tightening and upward shift in guidance underscores confidence in demand from cloud and AI customers and provides a quantitative anchor for valuation discussions.

Second quarter 2026 bookings signed during the period are expected to generate $307 million of annualized GAAP rental revenue at 100 percent share, with $208 million attributable at the company’s share. Within this total, $108 million came from the zero-to-one megawatt plus interconnection category, marking a third consecutive quarterly record for that segment and highlighting the importance of high-connectivity, smaller-scale deployments alongside larger hyperscale builds.

Backlog also reached a record $1.9 billion by the end of the second quarter of 2026, giving Digital Realty a sizeable pipeline of contracted revenue that has not yet fully flowed through reported results. In July 2026, the company signed two hyperscale leases representing $410 million of annualized GAAP base rent at 100 percent share, adding another layer of visibility around future income and reinforcing its positioning with the largest cloud and AI infrastructure buyers.

From a growth perspective, investors can compare the $2.13 core FFO per share excluding net promote in the second quarter of 2026 with the prior-year level, which is lower by 14 percent, to see that the company has been able to translate strong leasing into per-share cash flow improvement. When that progress is combined with an $8.15 to $8.20 full-year 2026 FFO guidance range, the numbers indicate that Digital Realty expects the pace of FFO generation to remain robust through the second half of the year.

AI data center momentum and institutional demand

The broader backdrop for Digital Realty’s platform is a rapidly expanding global data center investment cycle, with industry projections indicating that total data center investment could reach $3 trillion by 2030. This long-horizon estimate reflects growing demand from artificial intelligence workloads, cloud services, and high-performance computing, all of which require significant, power-dense infrastructure.

Policy developments and regional allocation decisions illustrate how governments are actively enabling this capacity expansion. For example, a recent announcement from Singapore’s economic development authorities indicated that the country has provisionally allocated 200 megawatts of new data center capacity to four operators, including Digital Realty, with each operator receiving a 50 megawatt tranche. That decision reinforces Singapore’s role as a trusted hub for AI and data center investments and gives Digital Realty a quantifiable foothold in a key Asia-Pacific market.

In the United States, policymakers have highlighted AI data centers as engines of construction employment, tax revenue, and long-term infrastructure investment, reinforcing the view that governments will work to accommodate power and grid connections for large-scale facilities. This supportive environment, combined with efforts to accelerate grid interconnections for big energy users, helps underpin Digital Realty’s ability to bring new capacity online in regions such as Northern Virginia, where demand for hyperscale-ready sites remains intense.

Recent industry commentary points out that Digital Realty has strengthened its position in Northern Virginia, the world’s largest data center market, through transactions including a $3.5 billion deal to acquire a stake in a portfolio of Virginia data centers. That move bolsters the company’s presence in a region where cloud computing and AI users are driving higher infrastructure needs and where capacity remains a critical resource for hyperscalers.

On the capital markets side, institutional investors have been adding exposure to Digital Realty. Recent filings show fresh positions from multiple asset managers, consistent with a view that the company’s raised FFO guidance, growing backlog, and AI-linked leasing pipeline justify continued participation even after the stock’s advance into the $190 range. Consensus data compiled by market research sources indicate a Moderate Buy rating on Digital Realty with a consensus price target of $219.45, which stands above the current $190.81 share price and suggests that the average analyst still sees room for appreciation.

For context, that $219.45 consensus target is almost 15 percent higher than the $190.81 opening level cited for the most recent session, illustrating that the street’s expectations embed some further upside from today’s valuation if Digital Realty can continue to execute on its AI and cloud data center strategy.

Dividend, earnings profile, and cash flows

Digital Realty’s cash generation profile is reinforced by its dividend policy. The company recently announced a quarterly dividend of $1.22 per share, payable on September 30, 2026 to shareholders of record as of September 15, 2026, with an ex-dividend date on the same day as the record cutoff. Annualized, that payment equates to $4.88 per share, which at the $190.81 share price translates into a dividend yield of about 2.6 percent.

The second quarter 2026 earnings release also highlighted that Digital Realty generated revenue of $1.92 billion in the period, exceeding the $1.66 billion consensus estimate. That represents a 28.9 percent year-over-year revenue increase compared with the same quarter in the prior year, demonstrating how the company’s data center portfolio is scaling with customer demand.

However, the quarter was not solely a story of beats. On the reported earnings per share line, Digital Realty posted $1.21, which missed the $1.98 consensus by $0.77. Despite this miss on the traditional EPS metric, investors have largely focused on FFO and cash flow measures, given the REIT structure and the importance of non-cash items in GAAP earnings. Sell-side analysts expect the company to deliver 8.4 in EPS for the current fiscal year, compared with the $8.15 to $8.20 core FFO guidance range, which helps frame expectations around both accounting earnings and cash-flow-oriented metrics.

From a ratio perspective, the $4.88 annual dividend against mid-range core FFO guidance of $8.175 per share implies a payout ratio of around 60 percent on that measure, which leaves room for reinvestment in new capacity while still returning cash to shareholders. This balance is important as Digital Realty finances large projects such as hyperscale campuses and regional expansions, including the newly allocated 50 megawatt slice in Singapore.

Investors watching profitability will note that Digital Realty reported a return on equity of 3.34 percent and a net margin of 11.80 percent in the second quarter of 2026. While these figures are modest relative to some technology companies, they are generally consistent with capital-intensive real estate infrastructure businesses where depreciation and interest costs are meaningful. The key is that FFO, backlog, and leasing metrics point to a business that can grow its cash flows even as it continues to invest heavily in new data center capacity.

Representative product: carrier-neutral AI-ready campuses

Digital Realty’s business is built around large, carrier-neutral data center campuses that can support both hyperscale cloud providers and enterprise clients running AI workloads. A typical facility offers multiple megawatts of IT power capacity, dense connectivity options, and modular space that can be configured for different tenant requirements, ranging from single-cabinet deployments to entire suites dedicated to GPU clusters.

Within these campuses, Digital Realty’s interconnection-focused offerings, such as high-bandwidth cross-connects and on-ramps to major cloud platforms, are central to its zero-to-one megawatt plus interconnection category, which generated $108 million of annualized GAAP rental revenue in the second quarter of 2026. This segment’s record performance over three consecutive quarters underscores how critical low-latency connectivity and flexible capacity are for AI workloads that often need to move large datasets between storage, compute, and external services.

For customers deploying generative AI and machine learning applications, the ability to access a mix of hyperscale cloud regions and specialized GPU clusters within the same interconnected ecosystem reduces complexity and can improve performance. Digital Realty’s campuses are typically designed with high redundancy in power and cooling, and they increasingly incorporate sustainability measures such as more efficient chillers, heat reuse projects, and renewable energy procurement to align with corporate ESG targets.

In Singapore, where Digital Realty has been allocated 50 megawatts of new data center capacity, future campuses are expected to cater to regional AI demand from financial services, gaming, and technology firms. The planned capacity expansion there will likely leverage modern designs that concentrate compute density while managing local constraints on land, power, and environmental impact, mirroring the approach the company has taken in other major metros.

Stock positioning and market context

Digital Realty stock opened at $190.81 on August 21, 2026, with that level serving as a reference point against both consensus targets and the company’s improving fundamentals. With a consensus price target of $219.45 and core FFO outlook of $8.15 to $8.20 per share, the stock’s valuation embeds expectations of continued FFO growth and successful execution on AI and cloud infrastructure projects.

Compared with the $4.88 annual dividend, the $190.81 share price implies a modest yield that may appeal to investors seeking a combination of income and growth exposure in the data center space. The 2.6 percent yield sits alongside the company’s double-digit year-over-year revenue growth and 14 percent increase in core FFO excluding net promote income, giving income-oriented holders a reason to maintain positions while growth-focused investors focus on leasing metrics and backlog.

As of late August 2026, Digital Realty is listed on the New York Stock Exchange under the ticker DLR, trading in US dollars and participating in a sector that is increasingly seen as foundational to AI infrastructure. The stock’s current level below the consensus $219.45 target, while backed by record backlog of $1.9 billion and new hyperscale leases totalling $410 million of annualized GAAP base rent, presents a setup where numbers rather than narratives dominate the investment debate.

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Data center platform for AI workloads

Digital Realty’s global data center platform is designed to support AI, cloud, and enterprise workloads across multiple continents through a combination of hyperscale-ready campuses and interconnected colocation sites. Facilities are typically located in major metropolitan areas and network hubs, enabling customers to place compute and storage closer to end users and core network routes.

Key features of the platform include scalable power densities suitable for GPU clusters, robust cooling systems engineered to handle high thermal loads, and connectivity solutions that provide direct links to leading cloud platforms and telecom carriers. By allowing tenants to interconnect with partners and services within the same facility or campus, Digital Realty reduces latency and improves reliability for applications that need consistent performance.

The company’s focus on interconnection and carrier-neutral design is reflected in the zero-to-one megawatt plus interconnection bookings that reached $108 million of annualized GAAP rental revenue in the second quarter of 2026, a record level for three consecutive quarters. This data point illustrates how the company’s product mix is evolving in response to AI workloads that often start small but can scale quickly as models move from experimentation to production.

Shares backed by leasing and dividend

Digital Realty stock, trading at $190.81 as of the August 21, 2026 session, is underpinned by a combination of record backlog, rising core FFO, and a $4.88 per-share annual dividend that equates to a yield of 2.6 percent at that price. With second quarter 2026 revenue of $1.92 billion, up 28.9 percent year over year, and core FFO excluding net promote income of $2.13 per share, up 14 percent from the prior-year period, the shares reflect a business that is scaling with AI and cloud demand while maintaining a steady cash return to shareholders.

The consensus price target of $219.45 stands roughly 15 percent above the $190.81 opening level, a gap that captures analysts’ expectations for further appreciation if Digital Realty continues to convert its record $1.9 billion backlog and July 2026 hyperscale leases of $410 million annualized GAAP base rent into reported revenue and FFO over the coming quarters.

Company fact box

Company: Digital Realty Trust, Inc.
ISIN: US2538681030
Ticker: DLR
Exchange: New York Stock Exchange
Price (as of August 21, 2026, session open): $190.81 USD
Market cap: not disclosed in cited data
Sector / Industry: Real estate investment trust - data centers
Index membership: not specified in cited data
Next earnings date: not specified in cited data

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