The artificial intelligence story shows no signs of cooling.
For one, according to Grand View Research, the global AI boom could grow from about $137 billion in 2022 to more than $1.81 trillion by 2030.
Two, with growing AI demand, data centers are seeing substantial demand. In fact, there are projections that data center demand will double by 2030, thanks in great part to artificial intelligence. All of which could fuel further upside for Digital Realty (DLR).
Yielding 3.28%, the real estate investment trust owns data centers around the world. All of which are seeing substantial demand with the AI boom.
Analysts at BMO Capital just upgraded DLR to outperform. As noted by the firm, “We believe DLR remains well-positioned as a play on the AI-thematic, particularly within REITs, with room for further multiple expansion. Data center net absorption continues to set records (N. America leasing of ~4GW in 2023 and 5.5-6GW expected in 2024), supported by ongoing investments from hyper-scales as they develop their AI capabilities,” as quoted by Seeking Alpha.