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Digital Realty's (DLR) Growth Outlook Supported by Backlog, Amid Mixed Analyst Views

By Rizwan Siddiqui | September 30, 2025, 2:04 PM

Digital Realty Trust Inc. (NYSE:DLR) is one of the worst-performing data center stocks in 2025. Despite being a pure-play on data centers, the stock has lagged with a year-to-date decline of over 3%. However, its capabilities to provide the full spectrum of data center, colocation, and interconnection solutions continue to support its long-term outlook.

Analysts’ views on the stock remain mixed. While TD Cowen analyst John Blackledge reiterated his Hold rating and $163 price target on September 16, Irvin Liu from Evercore ISI reaffirmed his Buy rating with a price target of $200, implying a nearly 17% upside.

Digital Realty’s (DLR) Growth Outlook Supported by Backlog, Amid Mixed Analyst Views

On September 17, the company spoke at RBC’s Global Communication Infrastructure Conference, where CFO Matt Mercier discussed the company’s growth strategy with RBC’s John Acker. The discussion highlighted rising demand from AI-related workloads, alongside ongoing challenges around power availability in key markets.

The management also highlighted that Digital Realty expects funds from operations (FFO) per share to grow 6.5% in 2025, above the earlier expectation of 5%. The company also carries an $850 million backlog that is set to contribute meaningfully over the next three years. The company has 3 gigawatts of capacity in service and 750 megawatts under construction, about 60% of which is already leased, indicating strong demand.

Digital Realty Trust Inc. (NYSE:DLR) is a global REIT specializing in data center ownership and colocation services. Its facilities support cloud platforms, enterprise IT, and interconnection services.

While we acknowledge the potential of DLR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: Goldman Sachs Value Stocks: 10 Stocks to Buy and 14 Best Precious Metals Stocks to Buy Now.

Disclosure: None. This article is originally published at Insider Monkey.

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