Digital Realty’s AI-fueled pipeline points to double-digit FFO growth

Visible Alpha consensus points to a strong earnings trajectory for data center REIT Digital Realty Trust Inc. (NYSE: DLR), as the build-out of AI infrastructure, hyperscale cloud capacity and connectivity services drives demand for scarce data center space. Consensus sees core funds from operations (FFO) per share rising from $7.39 in 2025 to $8.52 in 2026, $9.09 in 2027 and $10.15 in 2028, an implied compound annual growth rate of about 11% over 2025-28.

For 2026, the $8.52 consensus estimate sits above Digital Realty’s latest guidance of $8.15-$8.20, although the company has raised its outlook twice this year.

Consensus is similarly constructive beyond 2026. The 2027 estimate of $9.09 per share spans $8.86-$9.53 across 21 analysts, while the 2028 estimate of $10.15 ranges from $9.68 to $10.85 across 19 estimates.

The outlook reflects expectations that sustained AI and hyperscale demand will support higher rental revenue and FFO over the coming years.

The growth expectations, however, come with significant capital requirements. Consensus expects capital expenditure jumping 61% year-on-year to $4.7 billion in 2026, then rising to $5 billion in 2027 and $5.2 billion in 2028. Net debt is expected to increase 16% to $17.4 billion this year, reaching $19.4 billion in 2027 and $21.6 billion in 2028.

Overall, Digital Realty’s FFO growth is increasingly dependent on converting its AI and hyperscale pipeline into revenue, while funding a capital-intensive expansion. The expected FFO growth through 2028 comes alongside an increase in capex and a steady rise in net debt, highlighting the scale of investment required to capture the next leg of data center demand.

This article was published by Visible Alpha, part of S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.