JPMorgan has reaffirmed its Overweight recommendations for two leading data center real estate investment trusts - Digital Realty Trust and Equinix - pointing to stronger pricing power and fresh lease activity as reasons to expect improved equity returns in 2026.
The firm left its December 2026 price targets unchanged at $210 for Digital Realty and $950 for Equinix. At the same time, JPMorgan nudged its 2026 revenue and profitability forecasts for both companies higher, citing anticipated pricing improvement arising from a capacity-constrained operating backdrop.
Market data show Digital Realty trading at $159.16 according to InvestingPro, with sell-side analysts collectively holding a consensus "Buy" stance and an average implied upside of about 23% to their targets. Over the prior twelve months, Digital Realty reported revenue growth of 8.67% and retains an InvestingPro overall financial health score classified as "GOOD" at 2.62.
Despite the positive medium-term outlook articulated by JPMorgan, both stocks underperformed in 2025. Including dividends, Digital Realty fell 10.1% while Equinix declined 16.9% over the same period. These movements contrasted with a 17.9% gain for the S&P 500 and a 2.9% rise for the RMZ index.
JPMorgan expects solid leasing metrics when the companies report fourth quarter 2025 results, with enterprise customer strength cited as a common tailwind. The bank also notes that Digital Realty could derive incremental advantage from larger-scale leasing opportunities due to its size. Digital Realty is scheduled to report fourth quarter 2025 results on February 5, 2026, which the firm frames as ten days away.
Operationally, JPMorgan highlights that Digital Realty is expected to commence $126 million of annualized rent in the fourth quarter of 2025. That expected rent addition is noted as being slightly offset by the company’s contributions to the U.S. Hyperscale Fund. Both platforms have begun marketing and signing deals now for capacity that is anticipated to come online in late 2027 and into 2028.
The recent company-level moves for Digital Realty underline the firm’s global expansion and infrastructure investments. Digital Realty announced the acquisition of TelcoHub 1 DC in Cyberjaya, Malaysia from CSF Advisors, marking an entry into the Malaysian market as part of a broader Southeast Asia build-out. The company also signed a $373 million Supply Capacity Agreement intended to enhance its data center infrastructure for artificial intelligence workloads.
Separately, Digital Realty, together with Reliance Industries and Brookfield Corporation, plans a joint investment of $11 billion in Andhra Pradesh, India, aimed at developing approximately 1 gigawatt of artificial intelligence data capacity.
Analyst activity around Digital Realty has been notable. HSBC upgraded the REIT from Hold to Buy and lifted its price target to $193, signaling confidence in sustainable growth prospects. Stifel reiterated a Buy rating with a $210 target, and Jefferies drew attention to robust demand trends across the data center sector, pointing to a reported 133% quarter-over-quarter increase in lease growth from Oracle as an indicator of broader market momentum.
Collectively, these broker actions and JPMorgan’s modeling adjustments reflect an analyst community that sees stronger pricing and leasing driving near- to medium-term improvement in financial metrics for the two REITs.
While the outlook hinges on pricing and lease execution in a constrained capacity environment, upcoming quarterly reporting and the ramp of new capacity in 2027-2028 will be key milestones for investors watching how contract commencements and infrastructure investments translate into revenue and margin improvement.