Digital Realty boosts annual core FFO, revenue forecasts on strong data center demand

April 23 - Digital Realty Trust DLR.N raised its annual funds from operations and revenue forecasts on Thursday, signaling strong demand for data center services driven by the boom in artificial intelligence.

Shares of the real estate investment trust rose more than 2.5% in extended trading.

As businesses increasingly shift their computing toward running AI applications, colocation data center REITs, which lease space and infrastructure to companies housing their servers, are expected to see a growth.

Texas-based Digital Realty leases out managed data centers to clients in sectors that range from cloud and information technology to social networking, communications and manufacturing.

Here are some details:

• Digital Realty now expects fiscal 2026 adjusted FFO, a key cash flow measure for REITs, in the range of $8 to $8.10 per share, compared to its earlier projection of between $7.90 to $8 per share.

• It also raised its 2026 total revenue forecast to be between $6.65 billion and $6.75 billion, from its earlier forecast of $6.60 billion to $6.70 billion.

• "We are swiftly advancing hyperscale AI-oriented capacity in the U.S., growing our connectivity-rich portfolio across key global markets, and broadening our capital base," CEO Andy Power said.

• Digital Realty posted revenue of $1.6 billion for the first quarter, in line with estimates, according to data compiled by LSEG.

• AFFO for the quarter stood at $2.04 per share, compared with estimates of $1.84.

• Digital Realty has recently entered Malaysia, Portugal and Bulgaria, while expanding its presence in Singapore, Japan and London.