Investing in Digital Realty Trust: A Smart Play on Artificial Intelligence Data Centers
As we enter the fourth quarter, the interest in artificial intelligence data centers remains strong, making Digital Realty Trust a key player in the space. According to analyst James Schneider from Goldman Sachs, the data center owner is a buy rating and a top pick designation. Schneider has raised his price target to $185, reflecting a potential upside of more than 13% over the current stock price.
Why should investors be interested in Digital Realty Trust? Schneider highlights the strong demand for AI from hyperscalers, as well as the limited power supply constraining new data center projects. With earnings on the horizon, there are high expectations for the company to deliver upside in leasing and pricing metrics in the third quarter. Management’s visibility on the sustainability of demand and current pricing could further boost the stock’s performance.
In addition to the solid fundamentals of Digital Realty Trust, Schneider notes that the data center group as a whole is poised for growth due to increased capital expenditures from hyperscalers. While investors have been bullish on data center stocks, they have recently turned more neutral on tower-focused names.
Overall, Digital Realty Trust has seen a 22% climb in its stock price year-to-date, making it an attractive investment opportunity. Keep an eye on this company as it continues to thrive in the AI data center market.
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