Digital Realty Stock Falls 5% After $3.5 Billion Acquisition of Blackstone Data Center Stakes

Key Stats for Digital Realty Stock

• Pre-market price change for Digital Realty stock: -5%
• $DLR Share Price as of Jun. 29: $191
• 52-Week High: $208
• $DLR Stock Price Target: $219

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What Happened?

Digital Realty (DLR) stock dropped roughly 5% in premarket trading today after the company announced it’s buying a $3.5 billion stake in three hyperscale data centers from Blackstone.

The deal is structured as $1.2 billion in cash and $2.3 billion in stock, with closing expected today.

Specifically, Digital Realty is purchasing Blackstone’s 80% interest in two 96-megawatt data centers in Manassas, Virginia, plus a 50% interest in a third 96-megawatt facility in Sterling, Virginia.

Together, the three facilities total 288 megawatts and are valued at roughly $7.8 billion on a gross basis. All three are fully leased to investment-grade hyperscale customers under 15-year leases with a blended Aa3/AA- rating and 3.6% annual rent escalators.

Despite today’s stock drop, Bernstein SocGen Group reiterated its Outperform rating on Digital Realty, with a $232 price target.

The firm sees the acquisition as a positive step, even as Digital Realty stock currently trades above its fair value estimate based on fundamental metrics.

This Blackstone deal isn’t happening in isolation.

Digital Realty has been on an acquisition streak recently, including a

• $475 million purchase of 1,440 acres in Kansas City in April, complete with a secured 600-megawatt power agreement,
• $650 million deal to increase its ownership stake in Teraco to 77%,
• $485 million acquisition of Columbia Capital.

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What the Market Is Telling Us About Digital Realty Stock

The premarket selloff in Digital Realty stock likely reflects investor concern about dilution from the $2.3 billion stock issuance used to fund part of the deal, even though management expects the transaction to be leverage-neutral and accretive to core funds from operations in both 2027 and 2028.

The broader business backdrop remains strong.

• In Q1 2026, Digital Realty posted its second-highest bookings quarter ever, including the largest single lease in company history, a 200-megawatt AI inference deal with a hyperscaler in Charlotte.
• The company’s development pipeline grew over 50% sequentially to 1.2 gigawatts under construction, with 61% already pre-leased.

Digital Realty has also maintained dividend payments for 23 consecutive years, currently yielding 2.56%, and has delivered a 22% return over the past six months. Revenue grew 14% over the trailing twelve months.

Wall Street’s consensus price target implies about 20% upside from current levels, suggesting analysts remain broadly constructive on Digital Realty stock despite today’s pullback.

The Blackstone transaction adds high-quality, fully-leased capacity in a key market, which fits the company’s strategy of expanding hyperscale infrastructure to meet growing AI-driven demand.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!