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rtificial intelligence must be housed, and the infrastructure that will support it is already expanding at a rapid pace. Nvidia is the most visible name in this boom, but its valuation—over 50 times earnings—reflects a speculative bubble that could burst if demand for AI chips cools. Even if Nvidia remains profitable, a slowdown would likely trigger a sharp drop in its share price, driven more by sentiment than fundamentals.

    The real opportunity lies in the buildings that house the AI hardware. Data centers, purpose‑built to keep servers running, are the backbone of the AI ecosystem. Digital Realty, a global REIT, owns more than 300 such facilities across North and South America, Europe, Asia, and the Middle East, serving over 5,000 customers. Its portfolio is diversified geographically and across tenants, providing a steady rental income stream that is less sensitive to the volatility of chip demand.

    Overbuilding in the AI sector could actually benefit Digital Realty. Just as excess capacity in the early internet era lowered costs for users, a surplus of data center space could drive down leasing rates, attracting more tenants and increasing occupancy. The REIT already has 2.8 GW of capacity and land for an additional 4.3 GW, giving it ample room to grow and enhance cash flow over time.

    While the dividend yield of about 2.9% is below the REIT average of nearly 3.9%, it offers a more balanced risk‑reward profile for investors looking to tap into the AI infrastructure wave. Digital Realty’s diversified holdings and growth potential make it a compelling alternative to the high‑valuation tech stocks dominating the market.