Digital Realty Trust Faces Growth Constraints, Poor Exposure to AI Demand, BofA Says

MT Newswires Live01-09

Digital Realty Trust (DLR) faces growth constraints and has not met expectations for participation in artificial intelligence-related demand, BofA Securities said in a Thursday note.

The firm said that Digital Realty doesn't compete in the emerging data center markets that won the largest development deals in 2025, with the trend expected to continue in 2026.

BofA said it has a "positive" view on the data center industry in 2026, supported by supply constraints and "strong" projected demand, noting that Digital Realty's ability to capitalize on these trends will be determined by its development timelines, lease renewals, and geographic exposure.

The firm said it expects the company "to stay focused on primary markets in 2026, which may spell investor disappointment as they have historically looked for large quarterly leasing numbers."

BofA said, however, that an emerging growth narrative and a "solid" balance sheet are positives for Digital Realty.

BofA downgraded the stock's rating to neutral from buy and lowered its price target to $170 from $210.

Price: 153.27, Change: -1.60, Percent Change: -1.03

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