Digital Realty (DLR): Can a Data Center Landlord Become the Control Panel for Enterprise AI?

Anthropic CEO Dario Amodei's call to slow AI development has led to market repricing, affecting AI infrastructure stocks. Companies like CoreWeave, Lumentum, and NVIDIA are exposed to potential slowdowns, with some stocks down significantly. Bernstein notes that frontier labs account for over half of cloud commitments, and a slowdown could impact data centers and chipmakers. Tier 1 data center operators like Equinix and Digital Realty may benefit. Q3 earnings from major tech companies will be cr

Emerald AI secured $150M in funding, with NVIDIA (NVDA) and Digital Realty (DLR) involved in a project to optimize AI infrastructure within power grid limits. The project, a 100MW research factory in Virginia, is expected online later this year. Success depends on balancing grid response and computing performance. NVDA's software and DLR's facilities aim to support customer demand and operational efficiency, respectively.

Digital Realty is investing $80 million in a new data center in Nairobi, Kenya, adding 6.4 megawatts of capacity. The NBO2 facility expands the company's presence in East Africa, serving enterprises and cloud providers. The investment reflects growing demand for digital infrastructure in the region, driven by cloud adoption and AI workloads.

Digital Realty Trust (DLR) reported $707M in annualized GAAP base rent bookings for Q1 2026, with a record $1.9B backlog. Equinix (EQIX) saw 16.4% revenue growth and raised AFFO guidance. Iron Mountain (IRM) grew revenue by 39% YoY, driven by data center leasing. All three REITs are benefiting from AI-driven data center demand.

Digital Realty (DLR) is acquiring a 40-acre office campus in Rolling Meadows, Illinois, for $81.5 million. The seller, Brennan Investment Group, bought the property out of foreclosure in 2023 for $27 million. This deal follows Digital Realty's $90 million purchase of the Hawthorne Race Course property in Stickney, Illinois. Both acquisitions highlight the company's expansion in the Chicago area, though local pushback may pose challenges.

Mizuho maintains Outperform ratings on Equinix (EQIX) with a $1,275 price target and Digital Realty (DLR) with a $223 price target, citing potential gains of 22% and 20% respectively. The firm notes growing state and community opposition to data center construction due to concerns over electricity, water use, and environmental impacts. Mizuho believes under-construction projects are less at risk, but land banks may face some uncertainty.