BTIG has initiated coverage on two prominent data center REITs, assigning Buy ratings to both Digital Realty Trust and Equinix as demand tied to artificial intelligence infrastructure accelerates activity across the sector.
In its initial coverage, BTIG emphasized that the two companies are well positioned to benefit from concentrated footprints in Tier 1 markets, large development pipelines, and market dynamics - notably power scarcity - that have constrained the addition of new supply. The firm expects this combination of factors to support high-single-digit to low-double-digit earnings growth across the pair over the coming years.
Digital Realty Trust (DLR)
BTIG started coverage of Digital Realty with a Buy rating and a $215 price target, which the firm said implies roughly a 22.6% total return. The analyst note highlights Digital Realty's more than 300 data centers concentrated in leading markets, where limited power availability and robust hyperscaler demand have tightened supply conditions.
Specifics cited by BTIG include $16.5 billion of active development projects and a land bank capable of supporting about 5 gigawatts, which the firm estimates could underpin approximately $65 billion of potential future development at attractive low double-digit yields. BTIG's financial forecasts call for adjusted funds from operations (AFFO) per share growth of 8.5% in 2026 and 12.2% in 2027.
On balance sheet metrics, BTIG characterizes Digital Realty's leverage as flexible, noting a 4.7 times debt-to-EBITDA ratio, and points to a growing private capital business as a diversified funding source. The company is described as operating 309 colocation and hyperscale data centers across more than 30 countries, serving both wholesale and retail colocation customers and supporting an interconnection business with in excess of 230,000 cross-connects.
In a related move, Digital Realty announced it is acquiring Blackstone's interests in three fully leased hyperscale data centers in Northern Virginia. The transaction is a cash-and-stock deal that BTIG reports valuing the assets at about $7.8 billion on a gross basis. Following that announcement, several firms including Stifel, BMO Capital, and Bernstein reiterated Outperform or Buy views on the company.
Equinix (EQIX)
BTIG also initiated coverage on Equinix with a Buy rating and set a $1,210 price target, which the firm says implies an 18.9% total return. The brokerage expects Equinix's footprint, concentrated in Tier 1 markets, to generate meaningful internal growth driven by higher utilization, constrained supply and rising rents.
BTIG cites roughly 28% cumulative growth in monthly recurring revenue per cabinet over the past four years for Equinix. The company is described as operating more than 280 data center facilities across 75-plus metropolitan markets, serving over 10,000 customers and supporting in excess of 500,000 total interconnections.
Equinix's development runway is noted as including an approximately $8 billion colocation pipeline with expected cash yields around 25%, plus an $18 billion hyperscale development opportunity. BTIG projects AFFO per share growth of 12.1% in 2026 and 8.8% in 2027 for Equinix.
BTIG's coverage also references recent commercial developments at Equinix, including an expanded collaboration with Cisco and NVIDIA to deploy AI infrastructure across the company's global data center network. Separately, Stifel has maintained its Buy rating on Equinix and signaled confidence in the company's position to benefit from an accelerating AI infrastructure cycle.
Outlook
BTIG's initial coverage places Digital Realty and Equinix as top picks within the data center REIT universe on the basis of market-leading portfolios, deep development pipelines and positioning to capture value amid constrained supply driven in part by power availability and hyperscaler demand. The firm’s projections for mid-to-high single-digit AFFO growth over 2026-27 and its assigned price targets reflect an expectation that these dynamics will support continued earnings expansion.
Note: The article presents BTIG's published coverage and related market commentary without adding external analysis or additional data.