Digital Realty boosts annual revenue forecast on data center demand

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(Reuters) -Digital Realty Trust raised its annual revenue and core funds from operations forecast on Thursday, as it expects an increase in demand for data center services due to businesses accelerating digital transformation efforts.     

Austin, Texas-based Digital Realty has benefited from a surge in demand as enterprises upgrade and outsource their IT infrastructure, further boosted by advancements in artificial intelligence technology.

The company is well positioned as a major beneficiary of Al and cloud megatrends, with strong demand driving improved volumes and pricing.

Analysts expect strong growth in data center activity through 2025, as increased infrastructure investment is plowed towards enhancing computing power for future AI implementations. 

Digital Realty leases out managed data centers to clients in sectors that range from cloud and information technology to social networking, communications and manufacturing.

The real estate investment trust now expects revenue between $5.93 billion and $6.03 billion for the year, compared with its earlier projection in the range of $5.83 billion and $5.93 billion.

It forecast annual core FFO in the range of $7.15 to $7.25 per share, up from its earlier outlook of between $7.05 and $7.15 apiece.

For the second quarter ended June 30, Digital Realty posted revenue of $1.49 billion, compared with estimates of $1.45 billion, according to data compiled by LSEG.

(Reporting by Juby Babu in Mexico City; Editing by Alan Barona)