Digital Realty (DLR) Ups Interconnectivity With ServiceFabric

Digital Realty DLR has unveiled ServiceFabric — an interconnectivity solution and orchestration platform. It is the industry's largest open fabric-of-fabrics platform. The platform's design aids customers in transitioning into a more data-centric architecture.

However, reflecting weaker broader market sentiments, shares of this data center real estate investment trust (REIT) closed at $121.03, depreciating 1.49% in the Jul 15 trading session following the announcement.

In 2021, Digital Realty sketched out a new collaborative plan to integrate interconnection platforms with multiple partners to combat the challenges posed by Data Gravity. DLR had also envisioned building the industry's largest open fabric-of-fabrics connecting centers of data.

To materialize this perception, Digital Realty unveiled its first connectivity service called ServiceFabric Connect under the ServiceFabric product family. The platform has been solely developed by DLR. It is now available to customers on an immediate basis in 61 sites and 32 metro markets across North America, Europe and Asia.

The platform extracts network and cloud connectivity elements from multiple sources, including Digital Realty and its partners, to render customers with end-to-end services required to fulfill their hybrid IT needs and support business goals.

Per Chris Sharp, CTO, Digital Realty, "ServiceFabric™ will incorporate the products of service providers in an open and neutral manner to enable holistic hybrid IT solutions for our enterprise customers.  We will be an industry steward championing this shift and, together, we can tackle Data Gravity head-on and build a new era of open, secure and dynamic connected data communities globally."

The demand for high-performing data centers is likely to escalate in the coming years amid high growth in cloud computing, the Internet of Things (IoT) and big data and elevated demand for third-party IT infrastructure. Growth in artificial intelligence, as well as autonomous vehicle and virtual/augmented reality markets, is anticipated to be robust over the next five-six years, providing excellent growth opportunities for this data center REIT.

DLR currently carries a Zacks Rank #3 (Hold). Shares of Digital Realty have declined 22.4% in the past six months compared with the industry’s fall of 15.5%.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the REIT sector are Extra Space Storage EXR, Pebblebrook Hotel Trust PEB and Summit Hotel Properties INN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Extra Space Storage’s 2022 FFO per share has moved 3.4% upward in the past two months to $8.26.

The Zacks Consensus Estimate for Pebblebrook Hotel Trust’s ongoing year’s FFO per share has been raised 2.8% over the past month to $1.80.

The Zacks Consensus Estimate for Summit Hotel Properties’ current-year FFO per share has moved 2.9% northward in the past month to $1.06.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.