Oppenheimer Analyst Lists Digital Realty Trust (NYSE:DLR) as Major Beneficiary of AI Megatrend

Oppenheimer recently initiated coverage of Digital Realty Trust, Inc. (NYSE:DLR) with an Outperform rating and $200 price target. Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions.

In an investor note, the advisory noted that Digital Realty was one of the largest and now most diversified datacenter operators with over 300 locations and capacity of 2.8GW, 5% of the global total. In Oppenheimer’s opinion, Digital Realty was well positioned as a major beneficiary of AI and cloud megatrends with strong demand driving improved volumes and pricing.

High demand datacenter clusters like Northern Virginia were operating at virtually 100% utilization, and the advisory also pointed out that the stock was trading below its five-year revenue multiple and in line on AFFO, despite the accelerating growth.

A close-up view of a technician installing a server in the data center facility, representing the reliable services provided by the company.

The firm recently launched its first US Hyperscale Data Center Fund, targeting $2.5 billion in equity commitments to support approximately $10 billion of hyperscale investments. The fund includes five operating assets and four development land sites, with $1.7 billion raised in the first closing.

While we acknowledge the potential of DLR, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DLR and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.