Digital Realty's (DLR) Japan Data Center Gets NVIDIA Certification
Digital Realty DLR recently announced that its latest KIX13 data center in Osaka, Japan, has earned its first NVIDIA DGX H100-ready certification for its ability to provide a dedicated, robust and resilient environment optimized for intensive computing systems deployments at scale. The accreditation is part of the NVIDIA DGX-Ready Data Center program launched in 2019.
Digital Realty was one of the first data center providers to be awarded this recognition at the launch of the program, and the latest development marks an important landmark in the company’s collaboration with NVIDIA. At present, DLR operates DGX-Ready data centers in more than 20 markets worldwide, including six sites across the Asia Pacific.
NVIDIA DGX SuperPOD is based on the fourth generation of NVIDIA's purpose-built artificial intelligence (AI) infrastructure, DGX H100. It forms the ground for computational power needed to train present day’s state-of-the-art deep learning AI models and fuel innovation for the future.
Enterprise customers can enhance data localization by leveraging DGX H100 to devise full-stack solutions that expedite AI deployments. This also allows them to simultaneously keep up with the global coverage, capacity and connectivity needs that are part and parcel of deploying AI at scale.
Also, the need for real-time data as a core strategy to implement instantaneous changes and decision-making has escalated with enterprises’ growing reliance on technology and the adoption of AI. With Digital Realty's highly connected PlatformDIGITAL community, customers can access vast volumes of data and run AI workloads confidently in an NVIDIA-accelerated environment while overcoming Data Gravity barriers. The company’s indigenous global service orchestration platform, ServiceFabric, paves the way for customers to efficiently manage their hybrid IT infrastructure.
Further, the high-power computing needs of AI make liquid cooling an attractive option as it can dissipate heat more efficiently. DLR’s precision-engineered power and cooling digital infrastructure caters to such requirements and allows for a future-ready data center environment that can handle the evolution from air to liquid cooling. With this, Digital Realty and its customers can materially reduce their Scope 1 and 2 carbon emissions by 68% and Scope 3 emissions by 24% by 2030.
Per Chris Sharp, chief technology officer, Digital Realty, “With Digital Realty's KIX13 DGX-Ready Data Center certification, we remain focused on delivering a meeting place that allows our customers to accelerate innovation and growth. AI is poised to have a dramatic impact on digital transformation initiatives, and it is critical to have a foundation in place to remove the Data Gravity barriers that inhibit innovation.”
Digital Realty’s global data-center portfolio is well-poised to capitalize on growth in AI, autonomous vehicle and virtual/augmented reality markets, which is expected to escalate over the next five to six years.
However, stiff competition from industry peers and a high interest rate environment raise concerns for the company.
DLR currently carries a Zacks Rank #4 (Sell).
Its shares have gained 22.9% in the past three months against the industry’s fall of 0.8%.
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Stocks to Consider
Some better-ranked stocks from the REIT sector are Ventas VTR, Iron Mountain IRM and W.P. Carey WPC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ventas’ 2023 funds from operations (FFO) per share has risen marginally over the past two months to $2.98.
The consensus estimate for Iron Mountain’s 2023 FFO per share has moved up marginally in the past two months to $3.96.
The consensus mark for W.P. Carey’s 2023 FFO per share has increased marginally over the past month to $5.36.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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