Digital Realty's $1.9B Backlog Tests AI Demand

Digital Realty Trust shares jumped 15.4% to $206.98 on July 24 after the data-center REIT raised its 2026 outlook and reported a record $1.9 billion lease backlog.

The useful question is whether AI infrastructure demand is now showing up as durable rent, or whether investors are paying ahead of leases that still need power, construction and customer deployments to convert into revenue.

What changed in the quarter

The company's SEC 8-K says Digital Realty filed second-quarter results on July 23. A StockTitan 8-K filing mirror reports $1.92 billion of revenue, up 29% from a year earlier, and Core FFO excluding net promote of $2.13 per share, up from $1.87 a year earlier.

The same filing raised 2026 Core FFO per share guidance, excluding net promote, to $8.15 to $8.20 from the earlier $8.00 to $8.10 range. Core FFO is a non-GAAP real-estate measure, so the number should be read as an operating-performance guide rather than a substitute for net income.

The backlog is the story

Digital Realty said second-quarter bookings are expected to generate $307 million of annualized GAAP rental revenue at 100% share, or $208 million at the company's share. The signed-but-not-commenced lease backlog reached $1.9 billion of annualized GAAP base rent at 100% share, or $1.4 billion at Digital Realty's share.

That backlog is not current cash rent. The filing says the weighted-average lag between new leases signed in the quarter and their contractual commencement date was nine months. That makes the next few quarters a conversion test: power delivery, buildout timing and customer readiness have to turn signed demand into billed capacity.

Why investors reacted

StockAnalysis quote page showed Digital Realty up 15.4% to $206.98 on July 24. The market move matters because it came after a broad selloff in AI-exposed equities earlier in the week.

The read-through is narrower than "AI demand is back." Digital Realty's filing points to actual leases, renewal spreads and future rent commitments. The StockTitan earnings release says the company had 310 data centers, 3.1 gigawatts of IT capacity and 8.5 gigawatts of buildable IT capacity as of June 30.

That puts the story beside other infrastructure tests, including Prologis's data-center power pipeline and the big-tech AI capex spiral. The capital market is rewarding evidence that power and buildings are being reserved, not only announced.

What to watch next

The next evidence is lease commencement, cash renewal spreads and whether new bookings keep pace with the backlog already signed. Digital Realty reported renewal leases representing $262 million of annualized cash rental revenue during the quarter, with renewal rate increases of 25.4% on a cash basis.

The countercase is simple. A record backlog can still disappoint if customers delay deployments, if power arrives late, or if financing costs make development less profitable. For now, the July 24 move says public investors treated signed data-center rent as one of the cleanest AI-demand signals in a noisy earnings week.

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