DLR Shares Tumble Amid AI Surge and NVIDIA Pact, Ranks 468th in Dollar Volume

Market Snapshot

On October 28, 2025, Digital Realty Trust (DLR) closed with a 2.29% decline in its stock price, reflecting a negative sentiment amid a 33.08% drop in trading volume compared to the previous day. The ticker ranked 468th in dollar volume among U.S. equities, with $250 million in trading activity. This performance contrasts with the company’s recent earnings report, which highlighted record core funds from operations (FFO) of $1.89 per share and a raised full-year guidance. Despite strong fundamentals, the stock’s downward movement suggests short-term market caution or profit-taking following the earnings release.

Key Drivers

Digital Realty Trust’s third-quarter 2025 results underscored robust demand for data center infrastructure driven by artificial intelligence (AI). The company reported a record backlog of $852 million and raised its revenue and earnings guidance, citing AI-related bookings accounting for over half of quarterly activity since mid-2023. This surge in demand aligns with broader industry trends, as enterprises accelerate cloud and AI deployments. However, the stock’s decline on October 28 may reflect investor concerns about near-term execution risks, such as potential oversupply in core U.S. markets or rising operational costs, which the company acknowledged in its earnings narrative.

A strategic partnership with NVIDIA further reinforced DLR’s positioning in the AI infrastructure sector. NVIDIA announced the establishment of an AI Factory Research Center at Digital Realty’s Virginia facility, powered by the Vera Rubin platform. This collaboration, part of NVIDIA’s broader initiative to expand AI infrastructure across the U.S., positions DLR as a key player in multi-generation, gigawatt-scale deployments. Such developments highlight the company’s ability to attract high-impact tenants and secure long-term contracts, which could bolster its revenue visibility.

Institutional investor activity also influenced the stock’s trajectory. Chilton Capital Management LLC increased its stake in DLR by 4.8%, now holding $17.21 million worth of shares. This move, alongside other institutional investments, signals confidence in the company’s growth potential amid the AI-driven data center boom. Conversely, CEO Andrew Power’s recent sale of $9.33 million in shares may have contributed to market skepticism, as insider transactions often serve as a proxy for executive sentiment.

The broader market environment added complexity to DLR’s performance. While the company’s 2028 outlook projects $7.9 billion in revenue and $1.0 billion in earnings, analysts note a projected $300 million decline in earnings from the current $1.3 billion. This discrepancy raises questions about margin sustainability, particularly as power availability and operational costs become more critical constraints in high-demand markets. Additionally, the wide range of community-derived fair value estimates—from $110.45 to $254.41 per share—reflects divergent views on DLR’s long-term potential, with some analysts citing a 11% upside potential to the current price of $197.70.

In summary, DLR’s stock price movement on October 28 encapsulates a tug-of-war between bullish fundamentals—such as AI-driven demand and strategic partnerships—and bearish risks, including supply-side pressures and execution uncertainties. While the company’s raised guidance and institutional support reinforce its investment narrative, investors remain cautious about macroeconomic and operational headwinds. The coming quarters will likely test DLR’s ability to balance growth with margin preservation, making its performance a key barometer for the data center sector’s resilience in an AI-dominated landscape.