Between 23 July and 5 August, the three companies in this group that actually own data centres each reported the best leasing quarter they have ever had and lifted full-year guidance. The share prices treated the news as barely worth repricing. That gap — between disclosed operating records and a flat tape — is the only genuinely new fact here, and it is not explained by interest rates.

What was disclosed

Digital Realty Trust, which builds and leases entire halls of computing capacity wholesale to cloud companies, reported on 23 July a record backlog of $1.9bn in annualised rent already signed but not yet commenced, renewals repricing 25.4% higher in cash terms, and two hyperscale leases worth a further $410m of annual rent signed in July after quarter-end and therefore excluded from that backlog (8-K, 23 July). It raised 2026 core funds from operations — the cash-earnings measure property companies report in place of net income — to $8.15–$8.20 a share (results release). It has $20bn under construction, 63% pre-leased, at an average stabilised yield of 11.5% against leverage of 4.7x earnings before interest, tax, depreciation and amortisation (EBITDA).

Equinix, which rents smaller footprints and network interconnection inside 270-plus facilities to more than 10,000 customers, followed on 29 July with revenue of $2.625bn, up 16%, and annualised gross bookings up 23% to $424m — management's "largest single guidance raise in the history of our company" (company newsroom). Adjusted funds from operations (AFFO) guidance went to $42.69–$43.29 a share, with capital spending doubled to $5.0–6.0bn (8-K). Iron Mountain, a records-storage company that has grafted a data-centre arm onto 1,450 document warehouses, then reported data-centre revenue up 39% to $263m and 75 megawatts leased in July alone.

Business verdict: CONFIRMS. Equinix's revenue growth accelerated across four straight quarters — 5.2%, 8.0%, 9.8%, 16.4% — with operating margin moving from 20.5% to 25.3%. Digital Realty went from 10.2% to 28.9%. Landlord pricing power is corroborated outside the filings: North American vacancy is at a record 1.6%, 0.3% in Northern Virginia, with over 74% of capacity under construction already pre-leased (CBRE).

The rates story does not fit

Digital Realty's entire month's gain landed between 22 and 28 July, bracketing its results. The weak payrolls print that knocked seven basis points off the 10-year Treasury yield came on 7 August — two weeks later — and the live policy debate is whether the Federal Reserve raises in September, odds of which fell to 42% from 58% (Trading Economics, CNBC). Duration is a headwind here, not the driver. Equinix's own restrained reaction was attributed to an elevated multiple and to how much capital it must now spend (Investing.com).

Valuation

Price-to-earnings is close to useless for depreciation-heavy property companies — Equinix at 66.8x trailing, Digital Realty at 89.3x tell you about accounting, not economics. On cash earnings, Equinix sits near 24.3x guided 2026 AFFO, at or just under the 25–30x band it has historically carried, and 6.6% below its 52-week high despite two guidance raises; its trailing multiple has compressed roughly eight turns since May. Digital Realty at 23.7x forward core FFO sits mid-range of its own 22–25x band. Iron Mountain is 20.5x forward AFFO on an EV/EBITDA of 15.8x, against 27.9x at Equinix. Valuation verdict: INCONCLUSIVE for Digital Realty at fair value; a supported de-rating at Equinix, where the multiple fell as the numbers rose.

Three of these seven are a different industry

Averaging this group hides everything. American Tower, Crown Castle and SBA Communications lease space on mobile-phone masts to wireless carriers, and their revenue is decelerating as fifth-generation network rollouts mature: American Tower went 7.7% to 4.7% growth over the same four quarters and has guided 2026 to zero growth in cash earnings per share, absorbing roughly 400 basis points of churn from a departing tenant (industry backdrop). Its forward price-to-earnings ratio of 25.1x sits above its trailing 23.7x — consensus expects earnings to fall. Crown Castle's reported revenue is shrinking after an $8.4bn fibre disposal; SBA is in a peak international churn year. Howard Hughes Holdings, a master-planned-community developer, has no data-centre business at all. Tellingly, American Tower's one data-centre subsidiary posted a record leasing quarter and had its growth outlook raised to about 15% — behaving like Equinix, not like its parent.

What the market is actually discounting

Not demand. Two things: hyperscalers building their own halls rather than leasing, with third-party leases retained for immediate needs (JLL outlook); and tenant credit, with default-swap spreads on the largest AI borrowers at record levels (CNBC). Neither has yet appeared in a single disclosed booking. Equinix has, however, said its blended cost of capital should rise around 150 basis points and leverage climb about a turn to 4.6x.

The setup

Where it stands — Record bookings and raised guidance at all three data-centre owners, met with flat-to-lower share prices and compressing multiples. Would confirm — Third-quarter renewal spreads holding above 20% cash at Digital Realty and Equinix bookings above $424m annualised. Would invalidate — Backlog falling below $1.9bn, or renewal spreads dropping into single digits as hyperscalers shift to self-build. Watch next — Third-quarter results in late October; Equinix has said it already booked 45%-plus of its quarterly target. Valuation — Equinix 24.3x guided 2026 AFFO versus a 25–30x historical band; Digital Realty 23.7x forward core FFO, mid-range.