When Digital Realty's largest expiring leases came due this spring, the landlord re-signed them at cash rents 66.7% higher. Across its whole renewal book the blended cash mark-to-market was a record above 25%, and management lifted full-year renewal-spread guidance by 250 basis points to 9-11% (Q2 2026 results). Digital Realty owns 309 data centers and rents entire halls to cloud and enterprise tenants on long leases — about 3.0 gigawatts of information-technology capacity in service, another 6.3 gigawatts buildable. Revenue rose 29% year on year in the June quarter, to $1.9bn, and operating income more than doubled.

Equinix sells the other half of the market: space by the cabinet, and more profitably the cross-connects that link tenants to one another inside its metro campuses. Its revenue growth has accelerated across four straight quarters, from 5.2% year on year to 16.4%. Operating margin widened over the same stretch from 20.5% to 25.3%. Adjusted funds from operations per share — the cash measure real-estate investors use in place of earnings — rose 18%, and the company added a record 9,700 net interconnections. On 29 July it raised both 2026 guidance and its long-term outlook, calling it the largest raise in company history. CoStar reported both landlords lifting outlooks on higher leasing volume and pricing.

Two days, not a month

The shares did not move with the rest of real estate. Over the 30 sessions to 17 August, Digital Realty gained 13.8% and Equinix 7.6% while Prologis fell 6.5%, Realty Income 4.9% and Simon Property 3.6%. That rules out the easy explanation: the 10-year Treasury yield sat near 4.70%, close to a 19-month high, so nothing about falling rates was lifting landlords. But the advance was not a grind either. Remove each name's two best days and Digital Realty is left with 1.1% and Equinix with minus 0.8%. One of those days was Digital Realty's 8.3% post-earnings gap. The other was 4 August, when both rose about 4% on three to four times normal volume as Prologis fell 3.5%.

Higher price, cheaper multiple

The unusual part is that three months of gains have been paid for by the revenue base rather than by rerating. Digital Realty trades at 10.69x trailing sales against 11.14x in May, when the stock was lower; Equinix at 11.02x against 11.17x. Reported earnings multiples are meaningless here — property depreciation buries net income, leaving Digital Realty at 91x trailing. On the cash measure, Digital Realty sits near 24.2x the midpoint of its raised core funds-from-operations guidance of $8.15-$8.20 a share, above the roughly 22x an outside valuation used in May. Equinix is near 25.5x guided 2026 AFFO, the bottom of the 25-30x forward range it has historically commanded. Enterprise value to EBITDA is 26.3x and 29.1x, with free-cash-flow yields of 1.86% and 1.26% — these are developers, not cash cows.

What the rent numbers don't settle

Digital Realty's under-construction pipeline has doubled since January to $20bn, covering 1.4 gigawatts that is 63% pre-leased at an 11.5% stabilized yield on cost. That spread is wide against build costs now running about $11.3m per megawatt globally, and $15-20m for AI-optimized halls, with cost per square foot climbing to roughly $960 from $630 a year earlier. Some of it is being funded with stock: diluted shares rose 4.6% year on year on the Blackstone, Columbia Capital and Teraco deals. Core FFO per share still grew 14%.

Equinix has the opposite profile. Its share count grew 1.1%, but its capital is getting dearer — capex doubling to $5-6bn this year and $5-7bn annually through 2029, leverage rising a full turn to about 4.6x, and blended cost of capital guided up roughly 150 basis points. Against that it reports 27% cash-on-cash yields on growth capital, stabilized assets 82% utilized and churn at 1.8%, the low end of its range. It says it has no revenue concentration, a structural contrast with Digital Realty's concentrated hyperscale tenants.

Analysts do not model the current pace continuing. Consensus has Digital Realty revenue up 16.0% this year and 11.1% next, against the 28.9% just reported; Equinix up 11.0% and 10.7%, the low end of management's own 10-13% frame. Both stocks sit within 3% of their 52-week highs. The demand case rests on power: JLL cites Goldman Sachs projecting US data-center demand rising from 31 gigawatts in 2025 to 66 gigawatts in 2027.

The setup

Where it stands — Record leasing and raised guidance at both landlords, but a month's gain compressed into two trading sessions each. Would confirm — Digital Realty holding cash renewal spreads above the raised 9-11% guide in the September quarter. Would invalidate — Stabilized yield on cost slipping below 11.5% as power and construction costs reprice the pipeline. Watch next — Third-quarter results in late October, with Equinix's stated 45%-plus of its Q3 bookings target already booked. Valuation — Digital Realty near 24.2x guided core FFO versus ~22x in May; Equinix near 25.5x AFFO, bottom of its 25-30x range.