Digital Realty Trust (DLR) is back in focus after institutional investors shifted positions, management updated its 2026 guidance around AI and cloud infrastructure, and the company expanded into Portugal with a new Lisbon data center facility.

Recent company updates around AI data centers, dividend capacity, and expansion into Lisbon have come alongside a 30 day share price return of 4.91% and a 90 day share price return of 13.71%. The 1 year total shareholder return of 22.74% sits against a much larger 3 year total shareholder return of 87.99%, suggesting momentum has cooled somewhat after a strong multi year run.

If these data center moves have caught your attention, it could be worth seeing what else is happening in AI infrastructure by checking out our 35 AI infrastructure stocks today.

With Digital Realty now trading at US$180.59, alongside an estimated 24% intrinsic discount and an 8.5% gap to analyst targets, the key question is whether there is still a buying opportunity here or if markets are already pricing in future growth.

Most Popular Narrative: 63.5% Overvalued

According to the most followed narrative on Digital Realty Trust, the fair value sits at $110.45, well below the last close of $180.59, which puts the current price under the spotlight.

Digital Realty should be a leading global provider of AI-ready and hyperscale data centers, with stronger cloud partnerships, a global footprint, and higher-margin interconnection services. Revenue Growth: 7-9% CAGR driven by AI, cloud, and interconnection services.

Curious how that fair value comes together? The narrative leans on steady revenue compounding, higher margins, and a future profit multiple usually reserved for premium growth stories.

Result: Fair Value of $110.45 (OVERVALUED)

However, higher interest costs on a leveraged balance sheet, as well as intense competition from hyperscalers building their own facilities, could quickly challenge that fair value story.

Another View: DCF Says Undervalued

The user narrative sees Digital Realty as 63.5% overvalued at a fair value of $110.45, but our DCF model comes to a very different conclusion. It suggests fair value of $237.70, with the current $180.59 price sitting 24% below that mark. Which story feels more convincing to you?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Digital Realty Trust for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

There are mixed signals on value and risk here, so if this leaves you undecided, take a moment to review the data for yourself and move quickly to form your own view, starting with 3 key rewards and 2 important warning signs.

Looking for more investment ideas?

If this DLR story has you thinking bigger, do not stop here. Line up a few more ideas with solid numbers and clear risk reward trade offs.

• Target resilient income by checking out 14 dividend fortresses that could help anchor your portfolio when growth stories move around.
• Hunt for quality at a sensible price with our 50 high quality undervalued stocks that screen for strong fundamentals at potentially appealing valuations.
• Spot opportunities others might be missing by scanning our screener containing 23 high quality undiscovered gems before they land on every investor’s radar.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.