Digital Realty Trust, Inc. (NYSE:DLR) plans to release fourth quarter 2025 results on Feb. 5, 2026.
BofA Securities analyst Michael Funk downgraded the company from Buy to Neutral and lowered the price forecast from $210 to $170.
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The analyst writes the company has lagged in capturing AI-driven demand, as the largest 2025 development deals favored emerging data center markets outside its footprint.
This trend is expected to continue in 2026, with AI projects surpassing 1GW and customers prioritizing speed to market, adds the analyst.
Funk said that the growth is constrained by the company’s scale and development schedule, creating downside risk to fourth-quarter leasing forecasts, while multiple expansion is limited by historically negative REIT sentiment.
With AI projects exceeding 1GW shifting to emerging markets, the company’s focus on primary markets may disappoint investors seeking large quarterly leasing, adds the analyst.
The analyst says that strong demand and supply constraints support a positive 2026 outlook for data centers, but Digital Realty Trust growth will depend on development timelines, lease renewals and market focus.
Funk raised the EPS estimate to $7.34 (from $7.28) for 2025, $7.92 (from $7.85) for 2026 and $8.64 (from $8.58) for 2027.
DLR Price Action: Digital Realty Trust shares are down 1.67% at $152.28 at publication on Thursday.
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