Digital Realty

Management is leaning on a multi‑pronged funding model: development JVs, asset sales, and the U.S. Hyperscale Fund (>3 billion of LP commitments to date) to scale capacity with less corporate leverage. This is sensible in a power‑scarce upcycle.

We note share count rose year over year (full‑year 2025 diluted weighted average ~346 million vs ~330 million in 2024), reflecting ATM issuance that partially funded growth and balance sheet actions. Dividend policy targets an AFFO payout around the mid‑70s percent, leaving internal capital for maintenance and selective growth.

We credit disciplined refinancing and pre‑leasing but deduct for equity issuance and recurring capex intensity that depresses AFFO in heavy build periods. Net, capital allocation is good, pragmatic, and improving.