Digital Realty raised full-year 2026 FFO guidance and reported Q2 results reflecting robust AI datacenter demand, sustained customer capex, and strong capacity utilization.

Digital Realty Trust raised its full-year forecast for funds from operations on Thursday, betting on resilient leasing momentum from cloud and AI customers to drive growth. The Austin, Texas-based real estate investment trust, which provides data center, colocation and interconnection solutions, saw its shares rise 3% in extended trading following the announcement.

Digital Realty leases managed data centers to clients across industries ranging from cloud and information technology to social networking, communications, and manufacturing. The company has emerged as a major beneficiary of the race to adopt generative AI, which requires vast amounts of computing power housed in specialized facilities.

The company now expects fiscal 2026 adjusted funds from operations—a key cash flow metric for REITs—in the range of $8.15 to $8.20 per share, compared with its earlier projection of $8.00 to $8.10 per share. It also raised its annual total revenue forecast to between $6.85 billion and $6.95 billion, up from its prior guidance of $6.65 billion to $6.75 billion.

Digital Realty posted revenue of $1.92 billion for the second quarter ended June 30, up 29% and significantly beating the analyst consensus estimate of $1.66 billion. Adjusted FFO came in at $2.65 per share for the quarter, well ahead of the estimate of $1.86 per share.

As it looks to capitalize on the global boom in AI, Digital Realty has focused on expansions and entering new markets. The company is set to acquire a larger stake in three data centers in Northern Virginia from asset manager Blackstone in a $3.5 billion cash-and-stock deal, strengthening its position in the world's largest data center market.