Analyst Alexander Waters of Bank of America Securities maintained a Buy rating on Digital Realty (DLR – Research Report), with a price target of $205.00.
Alexander Waters has given his Buy rating due to a combination of factors that highlight Digital Realty’s strong market position and growth potential. The company is experiencing robust demand for its data centers, with significant lease commencements expected in 2025 and 2026. This demand is driven by hyperscale customers and the growing influence of AI, which is expected to follow a similar adoption pattern as cloud deployments, suggesting a prolonged period of growth.
Additionally, Digital Realty anticipates rising rental rates across both retail and wholesale deployments, with expectations of a 4-6% increase in 2025. The company is also poised to benefit from easing power constraints in its largest market, Northern Virginia, with substantial capacity expected to come online between 2026 and 2028. These factors, combined with the company’s strategic initiatives to enhance power delivery and leverage renewable energy, underpin Waters’s positive outlook and Buy rating for Digital Realty.
In another report released on March 20, Raymond James also reiterated a Buy rating on the stock with a $190.00 price target.