| \ Overview | PAGE | | --- | --- | | Corporate Information | 3 | | Key Quarterly Financial Data | 5 | | Consolidated Statements of Operations | | | Earnings Release | 7 | | 2024 Outlook | 10 | | Consolidated Quarterly Statements of Operations | 12 | | Funds From Operations and Core Funds From Operations | 13 | | Adjusted Funds From Operations | 14 | | Balance Sheet Information | | | Consolidated Balance Sheets | 15 | | Components of Net Asset Value | 16 | | Debt Maturities | 17 | | Debt Analysis and Covena ...

Foreign Exchange Rates U.S. Dollar / Pound Sterling U.S. Dollar / Euro Note: The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. Please see Non-GAAP Financial Measures in this document for further discussion. Prior to Digital Realty's investor conference call at 5:00 p.m. ET / 4:00 p.m. CT on July ...

Core Thesis - Digital Realty Trust (DLR) is transitioning from a cloud data center provider to an AI factory, capitalizing on the growing demand for AI-related services and advanced computing capabilities [2][12][25] Financial Performance and Projections - DLR's FFO for 2023 is reported at $1,950 million, with projections for 2025 indicating an increase to $3,705 million, representing a 90% growth [7][25] - The company anticipates a 2.36% year-over-year decline in FFO for Q2 2024, with revenue projected at $1.38 billion, a modest increase of 1.04% [7] - Operating expenses are expected to rise by 13%, leading to a net increase in FFO of 78% after accounting for these costs [7][25] AI Market Opportunities - The demand for AI-related hosting has led to a significant increase in hosting prices, rising from $80-90 per KW/month to $150-160 per KW/month, an increase of 82% [6] - DLR's bookings for AI-related services increased by 50% in Q1 2024, indicating strong market interest [13] - The company is positioned to host 60% of the expected GPU capacity from Nvidia and AMD, translating to an additional 1.251 GW of capacity by the end of 2025 [24][25] Strategic Partnerships and Funding - DLR has adopted a capital-light approach, engaging in joint ventures to fund new data centers, including partnerships with Realty Income and Mitsubishi, each contributing $200 million [8] - A significant $7 billion agreement with Blackstone for 500 MW of IT load across 10 data centers ensures long-term capacity delivery [8] Competitive Landscape and Challenges - The shift towards AI requires different deployment strategies compared to traditional cloud computing, with a focus on reducing latency and optimizing data center locations [14][15] - DLR faces competition from emerging players in the AI space, necessitating continued investment and adaptation to maintain its market position [15][22] Future Outlook - The forward price-to-FFO ratio indicates that DLR is currently overpriced relative to the real estate sector by 68%, but there is potential for a 10% appreciation in share price, targeting $170.7 [17] - The success of DLR will depend on effective execution in both AI and cloud computing sectors, alongside prudent capital allocation amidst high debt levels [18][22]

Core Viewpoint - Digital Realty Trust has transformed from a struggling entity to one of the best-performing real estate investment trusts (REITs) due to the surge in demand for data centers driven by the artificial intelligence (AI) boom [1][2][8] Company Performance - In 2024, Digital Realty has achieved a total return of 20%, significantly outperforming the S&P 500 and the overall real estate sector, which only saw a 1% return [2] - The company operates over 300 data centers globally and serves more than 5,000 customers, positioning itself as one of the largest REITs in the world [5] Market Dynamics - The demand for AI applications has led to a substantial increase in the need for data center capacity, with the potential to more than double global data center capacity over time [7][8] - Nvidia reported a remarkable 262% year-over-year revenue growth in its AI chip segment, highlighting the increasing reliance on data centers for AI processing [3] Financial Health - Digital Realty has a record backlog of leases yet to commence, indicating strong future revenue potential [6] - The company expects core funds from operations (FFO) to grow by the end of 2024, despite ongoing balance-sheet deleveraging [6] - The net debt to adjusted EBITDA ratio has improved from 7.1x to 5.4x since Q1 2023, and the percentage of variable rate debt has decreased from 26% to 4% since 2018, reflecting better financial management [12] Rental Growth - The average base rental rates per kilowatt have increased from $115 in Q1 2023 to $169 in Q1 2024, demonstrating rapid growth in rental rates due to rising demand [15] - Rental renewal spreads across the portfolio are approximately 12%, indicating strong pricing power and demand for leases [15] Investment Opportunity - Digital Realty is trading at about 24x expected FFO in 2024, which may not fully reflect the embedded rent growth that will become apparent as leases expire [13] - The company offers a dividend yield of over 3%, making it an attractive option for investors looking to gain exposure to the AI sector while receiving income [13]

Look at artificial intelligence stocks, like Nvidia (NASDAQ:NVDA), for example. Including Nvidia, here are even more top-quality stocks to buy now. Nvidia is the pioneering force behind AI. We also have to consider Nvidia is seeing massive growth with data centers – where it has 80% share of the market. All thanks to the massive, growing demand for AI GPUs. Source: Piotr Swat / Shutterstock.com "We believe the semi-demand upside from Apple can get bigger with its widening AI service, from a relatively low b ...

AUSTIN, Texas, July 10, 2024 /PRNewswire/ -- Digital Realty (NYSE: DLR), the leading global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions, today announced the acquisition of a highly connected colocation data center in the Slough Trading Estate for $200 million. The acquisition marks the company's entry into the west London submarket and complements existing colocation capabilities in the City and Docklands. The newly acquired campus features two individual da ...

Spotting read flags early can play a crucial role in protecting your portfolio. Today, I'm going to look into three stocks to sell. The stocks include two mortgage REITs and a data center REIT. Some investors may focus too heavily on a stock's dividend yield. I urge investors to take a look at troubling signs that may just send these stocks into a catastrophic plunge. Understanding the fundamentals combined with recent performance are two factors that go into investigating a stock. The mortgage REITs have a ...

Recent top stock upgrades from Wall Street analysts can often mean compelling long-term opportunities. When a widely-followed analyst raises the rating or price target on a company, investors pay attention. Such upgrades are usually based on a favorable change in the underlying business, an improving growth outlook or an attractive valuation. Digital Realty Trust (DLR) We start our discussion on top stock upgrades with the real estate investment trust (REIT) Digital Realty Trust (NYSE:DLR), which provides d ...

Loading... Although the company was heavily leveraged for much of 2023, the analyst believes its improved capital position following the Blackstone Inc. BX joint venture has positioned it well for the next two years. Last week, JP Morgan upgraded the stock to Overweight (from Neutral) and raised the price target to $175 from $150. Price Action: DLR shares are up 0.03% at $152.09 at the last check Monday. Loading... The analyst says he observes robust secular demand trends, propelled by AI and hyperscaler de ...

To participate in the live call, investors are invited to dial +1 (888) 317-6003 (for domestic callers) or +1 (412) 317-6061 (for international callers) and reference the conference ID #2977783 at least five minutes prior to start time. A live webcast of the call will be available on the Investors section of Digital Realty's website at https://investor.digitalrealty.com. Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation and interconnection solutions ...