Analyst Sees Growth Potential as COPT Defense (CDP) Delivers Steady Cash Flows

COPT Defense Properties (NYSE:CDP) is one of the worst-performing data center stocks in 2025. Its stock’s performance has been lacklustre throughout this year and over the past year (-4%).

The company develops and operates secure data centers tailored for national security, intelligence, and cloud computing workloads. Its portfolio is heavily concentrated in mission-critical locations near the Pentagon and intelligence hubs. This tenant base provides it with stable, long-term leases with low vacancy risk, which in turn result in predictable cash flows. However, overall growth is also limited due to the nature of high-security facilities and depends significantly on the government budget.

A stable cash flow profile has enabled COPT Defense Properties (NYSE:CDP) to increase its dividend by nearly 11% over the last three years. The stock currently offers a dividend yield of over 4%.

On September 11, at the BofA Securities 2025 Global Real Estate Conference, the company highlighted that, while it had initially set a goal of 400,000 square feet of vacancy leasing for 2025, it had achieved over 350,000 square feet in the first half. With that, they have raised their guidance modestly and are very confident in delivering on the upgraded guidance.

Following this presentation, JPMorgan analyst Anthony Paolone said that the current consensus estimates appear conservative, and thus modestly raised his estimates. As a result, on September 17, he raised his price target on the stock to $33 from $30. However, he maintained a Neutral rating.

While we acknowledge the potential of CDP 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.

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