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Core News Facts
Nvidia, known for producing powerful AI chips, faces a potential drop in demand as the AI infrastructure boom shows signs of overbuilding. The company, listed on NASDAQ as NVDA, has seen its stock price increase by over 23,000% in the past decade but carries a high price-to-earnings ratio of 53 times, indicating limited room for error.
Digital Realty, a REIT listed on NYSE as DLR, owns over 300 data centers across North America, South America, Europe, Asia, and the Middle East, serving more than 5,000 customers. While Nvidia may see revenue declines, Digital Realty could benefit from the excess AI infrastructure, generating stable rental income from its existing properties. The REIT currently has 2.8 gigawatts of capacity and the potential to expand to 4.3 gigawatts.
Digital Realty’s dividend yield is approximately 2.9%, below the REIT average of nearly 3.9%, indicating market awareness of its growth potential amid the ongoing AI infrastructure boom.
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