It wasn't that long ago when investors basically left Digital Realty Trust (NYSE: DLR) for dead. High-profile short-seller Jim Chanos called the major data center real estate investment trusts (REITs) his "big short" idea in 2022 -- but he didn't anticipate the coming artificial intelligence (AI) explosion.

What a difference a couple of years make. Digital Realty is one of the best-performing real estate investment trusts in recent history. So far in 2024, the REIT has delivered a 20% total return, not only outperforming the S 500, but also crushing the overall real estate sector. (The Vanguard Real Estate ETF produced a total return of just 1% in the same period.) And Digital Realty could just be getting started.

In simple terms, generative AI technology requires vast amounts of computing power. While there are some tech businesses that are clearly winners of the boom in AI investment -- such as chipmakers -- data centers are, as well. If you aren't familiar, data centers are facilities designed to house servers and other networking equipment in a secure and reliable environment.

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Source Fool.com