Digital Realty downgraded to Neutral at BofA on less AI upside than anticipated

As previously reported, BofA downgraded Digital Realty (DLR) to Neutral from Buy with a price target of $170, down from $210. Digital Realty hasn’t participated in AI related demand at the level the firm anticipated and the firm expects this trend to continue in 2026 as AI data center projects exceed 1GW and customers seek fastest time to market. Digital Realty’s growth acceleration is constrained by size and development schedule, the firm sees risk to consensus Q4 leasing forecast and views multiple expansion as limited, the analyst tells investors.