Is There a Massive Opportunity Ahead for Digital Realty Trust Stock?

AI stocks and cryptocurrency miners that are pivoting their hardware into AI information centers are blistery connected Wall Street close now, but it seems similar Digital Realty Trust (NYSE: DLR) has missed retired connected the rally. The banal has underperformed the S&P 500 implicit the past 5 years and is inactive down twelvemonth to date.

That anemic show whitethorn look shocking since this existent property concern spot (REIT) owns much than 300 information centers and serves implicit 5,000 customers, including immoderate notable names successful large tech. Digital Realty Trust has a compelling opportunity, but determination are immoderate cardinal nuances that explicate wherefore it hasn't soared similar different information halfway stocks.

Although Digital Realty Trust has acold much information centers successful its portfolio than peers specified arsenic IREN (NASDAQ: IREN) and Cipher Mining (NASDAQ: CIFR), it's important to retrieve that not each information centers are created equal.

Digital Realty Trust's information centers were built for much wide uses specified arsenic web hosting, unreality computing, and information storage. While those assets person helped the REIT nutrient precocious currency flows and support a respectable output -- it's presently astir 3% -- they aren't AI information centers. Regular information centers that are not heavy equipped with AI-accelerators similar Nvidia's GPUs oregon Broadcom's application-specific integrated circuits can't grip the workloads generated by grooming and moving AI tools.

That's wherefore immoderate companies specializing successful AI information centers alternatively of wide information centers person outperformed the S&P 500 this year. AI information centers are the ones that person been getting the multiyear, multibillion-dollar contracts.

Digital Realty Trust is investing heavy to drawback up with the trend: It's retrofitting immoderate of its information centers to enactment AI workloads -- a process that can take up to 18 months -- and it's besides gathering AI information centers from the crushed up. The REIT is down IREN and Cipher Mining successful capitalizing connected AI, but it has much properties and a larger lawsuit base.

Those 2 advantages don't substance overmuch today, but they could go immense catalysts successful 2 oregon 3 years, erstwhile Digital Realty Trust volition person galore AI information centers up and running. Then, it volition beryllium good positioned to scope caller deals with immoderate of its existing customers.