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Digital Realty Trust has raised its annual core FFO and revenue forecasts, reflecting strong demand for data center services fueled by AI growth. Hyperscalers like Amazon, Meta, Alphabet, and Microsoft are expected to invest over USD 360 billion this year, mainly for data center expansion. The company leases managed data centers to clients across IT, cloud, communications, and manufacturing sectors and recently partnered with Dell Technologies and DXC Technology to integrate AI solutions into customer data. Quarterly revenue and core FFO exceeded estimates, showing continued growth momentum.
Digital Realty Trust has raised its annual projections for core funds from operations (FFO) and revenue, driven by rising demand for data center services amid the growth of artificial intelligence. The company has experienced increased activity as more businesses upgrade and outsource their IT infrastructure, while AI advancements have further accelerated the need for modern, scalable data centers. Advertisement
Hyperscale cloud providers, including Amazon, Meta, Alphabet, and Microsoft, are expected to invest over USD 360 billion this year, mainly to expand AI infrastructure and support data center operations. This spending surge is expected to further boost Digital Realty's leasing activity, providing a strong foundation for revenue growth in the coming months.
Digital Realty specializes in leasing managed data centers to clients across sectors such as cloud services, IT, social networking, communications, and manufacturing. Earlier this month, the company announced a strategic collaboration with Dell Technologies and DXC Technology, aiming to integrate AI solutions directly into customers' data. This partnership combines validated use cases with expert-led implementation and end-to-end management to help clients adopt AI efficiently.
Based in Austin, Texas, Digital Realty now expects annual core FFO in the range of USD 7.32-7.38 per share, up from its earlier estimate of USD 7.15-7.25. The company's revenue forecast has also been raised to USD 6.03-6.08 billion, compared with the previous range of USD 5.93-6.03 billion.
For the third quarter, Digital Realty recorded revenue of USD 1.58 billion, surpassing expectations of USD 1.53 billion. Core FFO reached USD 1.89 per share, up from USD 1.67 in the same quarter last year. The results indicate that demand for data center services continues to strengthen, driven by both enterprise upgrades and AI-related infrastructure requirements.
Source Reuters
5th Jun, 2025
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