Data is serious business in today’s digital world. The more data we consume, the more are the requirements to property store and access the data. Gone are the days when individual companies used to have server rooms. Today, with the rise of cloud computing, the infrastructure has shifted towards full-blown data centers built across acres of land. A data center houses important networking equipment and servers. It requires power to run and needs a comprehensive HVAC system for optimal temperature control. Any problems at data centers can result in downtime, loss of economic activity, and millions of dollars in lost earnings for companies. Even the non-tech companies have now built an online presence, and therefore, data centers are not just a tech thing anymore. Real estate companies that build and operate these data centers may have bright growth prospects. If you want to buy real estate stocks 2021, then companies specializing in data centers may be an interesting proposition.
Digital Realty Trust’s 2Q2021 Numbers
On 29th July 2021, Digital Realty Trust announced its second-quarter 2021 earnings results. Revenues rose from $698 million in 2Q2020 to $768.8 million in 2Q2021. Operating income went from $152 million in 2Q2020 to $185 million. Funds from operations also rose from $414 million in 2Q2020 to $514 million. Overall, the growth trends were positive across various financial metrics. Digital Realty also continued its growth plans with the acquisition of a 5-acre land parcel in South Korea and an 18.5-acre land parcel in Australia. The company management also informed that the pandemic had not led to any major disruptions for the company. Data centers and IT infrastructure have been recognized as essential services/activities across the world. If you are looking to buy strong and resilient real estate stocks of 2021, then Digital Realty Trust could be among the options.
Technology-related stocks have had a strong run ever since the pandemic broke out. Ancillary businesses that are related to the technology sector have also benefited as people worked and lived from their homes, and online activity went up as a result. So, large and dominant data center businesses can potentially do well.