Digital Realty Trust raised its full-year forecast for funds from operations on Thursday, betting on resilient leasing momentum from cloud and AI customers to drive growth, sending its shares up 3% in extended trading.
Austin, Texas-based Digital Realty is a real estate investment trust (REIT) that provides data center, colocation and interconnection solutions.
The company leases managed data centers to clients across industries ranging from cloud and information technology to social networking, communications, and manufacturing, and has been a major beneficiary of the race to adopt generative AI, which requires vast amounts of computing power housed in specialized facilities.
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Digital Realty now expects fiscal 2026 adjusted funds from operations, a key cash flow metric for REITs, in the range of $8.15 to $8.20 per share, compared with its earlier projection of $8 to $8.10 per share.
The REIT also raised its annual total revenue forecast to be between $6.85 billion and $6.95 billion, from its earlier projection of $6.65 billion to $6.75 billion.
It posted revenue of $1.92 billion for the second quarter ended June 30, up 29% and beating analysts' average estimate of $1.66 billion, according to data compiled by LSEG.
Adjusted FFO came in at $2.65 per share for the quarter, ahead of an estimate of $1.86 per share.
The company has focused on expansions and entering new markets as it looks to cash in on the global boom in AI.
It is set to acquire a larger stake in three data centers in Northern Virginia from asset manager Blackstone in a $3.5 billion cash-and-stock deal, strengthening its position in the world's largest data center market.
