This under-the-radar real estate stock could be a winner of the A.I. boom

The boom in artificial intelligence should create a big winner in one of the economic areas investors are most worried about, according to Jefferies. Analyst Jonathan Petersen said in a Tuesday note to clients that Digital Realty Trust, a real estate company focused on housing data centers, will gain pricing power because of the extra demand for computing power created by AI.

But while investment trusts that own offices have seen demand weaken after the growth of hybrid work, Digital Realty's customers are data centers that appear poised for long-term growth. Jefferies estimated Digital Realty's property revenue will go from under $4.7 billion in 2022 to more than $7.2 billion in 2026. The stock has been moving higher over the past week but still looks cheap based on its history, according to Petersen.

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