Digital Realty Hits Record Bookings on AI Demand Amid Valuation Divergence

Digital Realty Trust (DLR) has reported record-breaking bookings for the fourth quarter and the full year of 2025, signaling robust operational momentum. The company's strong growth trajectory and positive guidance for 2026 are primarily fueled by the surging demand for AI infrastructure and cloud computing services. Despite the fundamental strength, analysts highlight a significant divergence in valuation models for the data center REIT. An earnings-based model suggests a fair value of $110.45, whereas a discounted cash flow (DCF) model estimates the value at a much higher $246.67. This discrepancy underscores the complexity of pricing in the long-term impact of the AI boom on the company's market capitalization. While the outlook remains bullish due to AI tailwinds, the wide valuation gap introduces a layer of uncertainty for investors.