Digital Realty grows in Europe amid AI demand

Digital Realty Trust (DLR) is expanding into Portugal and Bulgaria with data center acquisitions in Lisbon and Sofia, aiming to capture rising data traffic and AI workloads. The company, a global data center and interconnection operator, is extending its European platform as cross-border data flows reshape infrastructure demand.

Portugal and Bulgaria broaden the geographic mix of Digital Realty’s European portfolio and extend its reach into new customer bases and connectivity routes. Management is tying its existing global platform more closely to key subsea cable paths and emerging regional hubs rather than only adding floor space.

The Lisbon site is intended to serve as a data gateway between Europe, Africa and the Americas. It plugs Digital Realty directly into 16 subsea cables and includes a 2.4 megawatt facility located near the Carcavelos landing sites, a position that can matter for latency sensitive AI workloads and cloud traffic.

In Bulgaria, the Sofia acquisition, via the Telepoint deal, adds a dense interconnection hub in Southeast Europe. This expands PlatformDIGITAL’s reach into a region that is earlier in its data center build out than more mature markets such as Frankfurt or London, giving the company a new foothold to support digital infrastructure needs.

These transactions sit alongside Digital Realty’s existing Iberian presence in Madrid and Barcelona and its push into AI testing environments through the Digital Realty Innovation Lab. Together they reflect a focus on connectivity rich, carrier neutral campuses that can appeal to enterprise and cloud customers choosing where to locate workloads and interconnection points.

Digital Realty Trust recently reported quarterly earnings per share of $1.86, exceeding the consensus estimate of $1.83. Revenue for the quarter was $1.63 billion, above the $1.58 billion expected by analysts and up 13.8% from the same period a year earlier. The company posted a return on equity of 5.88% and a net margin of 21.41%.

The real estate investment trust has set its full year 2026 guidance at $7.90 to $8.00 in EPS, and on average analysts forecast 7.07 EPS for the current year. Digital Realty also declared a quarterly dividend of $1.22 per share, payable on March 31 to shareholders of record as of March 13, implying an annualized dividend of $4.88 and a yield of 2.7%. The dividend payout ratio is 135.56%.

Shares of Digital Realty recently traded at $182.57, giving the company a market capitalization of $62.73 billion. The stock’s 12 month range spans from a low of $129.95 to a high of $184.79. It trades at a price to earnings ratio of 50.71 and has a price to earnings growth ratio of 3.94, with a beta of 1.12.

Institutional investors own 99.71% of the company’s stock. Intech Investment Management LLC reduced its position in the third quarter by 56.4%, holding 10,310 shares valued at $1.78 million after selling 13,355 shares. Other institutions, including Security National Bank of Sioux City Iowa IA, Zions Bancorporation, Physician Wealth Advisors, True North Advisors and Nvwm LLC, have made smaller adjustments to their holdings.

Analysts covering Digital Realty have issued a range of opinions. Recent actions include Scotiabank lowering its price target from $206 to $189 with a sector outperform rating, Barclays (BARC.L) upgrading the stock from underweight to equal weight and raising its target from $161 to $164, and KeyCorp reiterating a sector weight view.

Weiss Ratings upgraded the shares from hold (c+) to buy (b-), while Wall Street Zen downgraded the stock from hold to strong sell. Overall, two analysts rate the stock as Strong Buy, sixteen as Buy and eight as Hold. According to MarketBeat.com, this results in an average rating of Moderate Buy and a consensus price target of $192.33.