It’s time to sell this stock

Digital Realty’s data-storage business model is moribund, consumed by the rise of cloud computing. Here's how you could short the shares, says Matthew Partridge.

People taking a selfie
More photographs have been taken this year than during the entire history of film cameras
(Image credit: © Getty Images)

One of the key developments in technology in recent years has been explosive growth in the amount of data produced worldwide. For instance, more photographs have been taken this year than during the entire history of film cameras. Similarly, an estimated 306.4 billion emails and 500 million tweets are sent every day.

While much of this digital information will go straight into the electronic equivalent of the recycling bin, a significant portion will be saved. No wonder, then, that demand for data storage has been booming. Over the past two decades, this has been good news for Digital Realty Trust (NYSE: DLR), a real-state investment trust (Reit). It builds large data centres, which it then leases to companies who want to store their data.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri