Digital Realty to Post Q3 Earnings: What to Expect From the Stock?

Core Insights - Digital Realty Trust (DLR) is expected to report third-quarter 2025 results on October 23, with anticipated year-over-year growth in revenues and funds from operations (FFO) per share [1] Financial Performance - In the previous quarter, DLR reported a core FFO per share of $1.87, exceeding the Zacks Consensus Estimate of $1.74, driven by steady leasing momentum and improved rental rates [2] - Over the last four quarters, DLR's core FFO per share surpassed the Zacks Consensus Estimate three times, with an average beat of 2.89% [2] Market Trends and Growth Drivers - The increasing adoption of cloud computing, Internet of Things, Big Data, and Artificial Intelligence (AI) is driving demand for data centers, benefiting DLR's leasing activity and revenue growth [3] - DLR's strategic focus on providing infrastructure for AI adoption is fostering partnerships with new clients, contributing to its leasing activity and revenue stability [4] Revenue Estimates - The Zacks Consensus Estimate for rental revenues in Q3 2025 is $1.03 billion, reflecting a 7.7% increase from $956.4 million in the same quarter last year [5] - Total revenue estimates for the quarter stand at $1.52 billion, indicating a year-over-year growth of 6.4% [5] Analyst Sentiment - Despite the positive revenue outlook, analysts' confidence in DLR's quarterly FFO per share has not increased, with the estimate remaining at $1.78, representing a 6.6% year-over-year growth [6] - The current Earnings ESP for DLR is -1.05%, and it holds a Zacks Rank of 2 (Buy), indicating uncertainty regarding a surprise in FFO this quarter [7] Competitive Landscape - Other REITs such as Ventas (VTR) and Extra Space Storage (EXR) are highlighted as potential stocks to watch, with favorable Earnings ESPs and Zacks Ranks [8][10]