NEW YORK, August 2, 2026, 12:06 p.m. EDT
- Shares ended Friday at $188.52, marking a 5.3% decrease from July 24.
- In the second quarter, 52% of annualized rent was generated from small-space and interconnection bookings.
- Results from Iron Mountain NYSE:IRM are due ahead of Wednesday’s market opening. U.S. July payroll figures are expected Friday.
U.S. markets remain closed on Sunday. Digital Realty ended Friday trading at $188.52, down 2.4%. The stock declined 5.3% over the week.
A Form 10-Q submitted after the market closed on Friday offered the latest update. It verified the quarter’s booking breakdown, requirements for capital, and funding risk.
The strongest indication for investors can be found beneath the main bookings figure. Leases for smaller spaces along with interconnection accounted for $108.3 million in annualized rent, making up 52% of Digital Realty’s portion of newly signed agreements.
| Second-quarter booking category | Annualized GAAP rent | Power booked | Rent per kilowatt | Share of total |
|---|---|---|---|---|
| 0–1 megawatt | $87.8 million | 26.1 MW | $280 | 42.1% |
| Interconnection | $20.5 million | — | — | 9.8% |
| Above 1 megawatt | $99.8 million | 52.9 MW | $157 | 47.9% |
| Other | $0.3 million | — | — | 0.2% |
Small-scale contracts consume less energy but come with higher prices. Their rental cost hit $280 per kilowatt, 78% above larger lease rates. The mark-up was 88% in the Americas, 61% in Europe, and 73% in Asia-Pacific.
Chief Executive Andy Power noted the achievement. “We signed more than $100 million of 0-1 MW plus Interconnection bookings for the first time.” Digital Realty Investor Relations
Top-line expansion outpaced the growth rate of underlying FFO. Revenue increased by 29% to reach $1.92 billion, supported by a $188 million promote. Core FFO, excluding the promote, climbed 14% to $2.13 per share. Core FFO also received a $27 million boost from an insurance settlement.
Digital Realty’s share of the contracted backlog stood at $1.4 billion. The weighted-average commencement lag was nine months. In July, hyperscale agreements contributed an additional $205 million in annualized rent.
Management increased its outlook for revenue and FFO, but the development budget saw an even sharper rise. Figures in the table reflect the midpoint of each stated range.
| 2026 guidance midpoint | April 23 outlook | July 23 outlook | Change |
|---|---|---|---|
| Revenue excluding promote | $6.70 billion | $6.90 billion | +3.0% |
| Core FFO per share excluding promote | $8.05 | $8.175 | +1.6% |
| Net development capital spending | $3.75 billion | $4.50 billion | +20.0% |
| Cash renewal spread | 7.5% | 10.0% | +2.5 points |
An initial funding analysis highlights the disparity. Using the FFO midpoint with 360.6 million diluted shares and units results in approximately $2.95 billion. The capex midpoint stands at nearly 1.5 times that amount. This does not represent a cash-flow projection.
Digital Realty raised capital by issuing equity for its expansion. By June, the company had sold 13.5 million shares at an average price of $184.94 each. Net proceeds totaled approximately $2.5 billion.
The overall data-center sector also saw losses last week. Major data-center REITs underperformed both the broader real estate sector and the S&P 500. These figures are based on closing prices from Friday to Friday.
| Security | July 24 close | July 31 close | Weekly move |
|---|---|---|---|
| Digital Realty | $199.08 | $188.52 | -5.3% |
| Equinix NASDAQ:EQIX | $1,084.24 | $1,019.28 | -6.0% |
| Iron Mountain | $128.31 | $122.32 | -4.7% |
| Vanguard Real Estate ETF (NYSEARCA:VNQ) | $100.81 | $98.95 | -1.8% |
| S&P 500 | 7,411.98 | 7,489.72 | +1.0% |
Shares of Equinix declined after the company projected weaker sales for the third quarter. Despite this, Equinix raised both its annual and longer-range forecasts. Investors now look to Iron Mountain’s results on Wednesday for the next update on the sector.
Wall Street maintains a positive outlook for Digital Realty. According to Google Finance, there are 19 buy recommendations, four holds, and zero sell ratings. The consensus price target stands at $221, which is roughly 17% higher than the closing price on Friday.
Two broader measures of demand are scheduled for next week. The ISM services index for July will be released Wednesday at 10 a.m. EDT, followed by U.S. payrolls data on Friday at 8:30 a.m. EDT.
Risks: Power limitations may postpone the commencement of leases. Expenses for development could increase again. Digital Realty reported $18.6 billion in debt, with net debt to EBITDA at 4.7 times. Issuing additional equity may reduce returns.
Investors face a straightforward measure. The higher rent per kilowatt must exceed the increased capital expenditure.
