Citi adds upside 90-day short-term view for Digital Realty

Citi adds upside 90-day short-term view for Digital Realty

Citi has upgraded its 90-day outlook for Digital Realty Trust Inc. (DLR) to "Buy," indicating a positive view on the stock's performance over the next three months. The move comes amidst growing optimism about the company's strategic expansion in Africa and its robust data center infrastructure.

According to the latest report from Citi, the investment bank has increased its price target for Digital Realty from $195.00 to $220.00, reflecting a significant upside potential [2]. This positive outlook is driven by several key factors, including the recent launch of Digital Realty’s third Lagos data center (LKK2) and the company's broader investment in Africa's digital infrastructure.

The LKK2 data center, located in Lekki, adds nearly 2MW of installed IT capacity and connects with the existing LKK1 facility, home to the 2Africa subsea cable landing station. This interconnection enhances Nigeria's role as a hub for international connectivity, providing businesses with access to over 46 landing points across 33 countries [1].

Meta, a major partner in the 2Africa project, sees Africa's youthful and rapidly growing population as both a challenge and an opportunity. The continent's digital infrastructure development is crucial for economic growth, financial inclusion, and social development. Meta's investment in the 2Africa subsea cable aims to provide Africans with a quality internet experience comparable to developed markets [1].

Digital Realty's strategic expansion in Africa is further bolstered by its integration with ServiceFabric, the company's global interconnection and orchestration platform. This platform links with LOS1, the region's largest internet peering point, and LOS2, its highly connected Victoria Island data center. These assets will deliver resilience, redundancy, and low-latency connectivity for enterprises expanding in Nigeria's digital market [1].

The 2Africa undersea cable, which encircles Africa and has two points of landing in Nigeria, is touted as the world's largest undersea cable. The deep-sea cable project is owned by a group of eight international partners, including Meta, Bayobab, China Mobile International, MTN GlobalConnect (now Bayobab), Orange, stc (center3), Telecom Egypt, Vodafone, and WIOCC [1].

Citi's upgrade reflects the company's strong fundamentals and its potential to benefit from the growing demand for reliable digital infrastructure. Digital Realty's robust financial position, with a market capitalization of $57.62 billion and a 1-year change of 12.08%, further supports its positive outlook [2].

References:
[1] https://brandcom.ng/2025/08/25/meta-launches-digital-realtys-third-lagos-data-centre-strengthens-africas-digital-infrastructure/
[2] https://www.investing.com/equities/digital-realty-trust-inc