The boom in artificial intelligence should create a big winner in one of the economic areas investors are most worried about, according to Jefferies. Analyst Jonathan Petersen said in a Tuesday note to clients that Digital Realty Trust, a real estate company focused on housing data centers, will gain pricing power because of the extra demand for computing power created by AI. “We view investing in DLR as one of the best ways to capitalize on this trend, given that high-performance AI computing takes place in data centers. Demand acceleration and limited available DC space gives DLR an unprecedented ability to push higher rents,” the note said. Digital Realty is part of the broader commercial real estate sector, which many investors are trying to avoid with higher rates and signs the economy is slowing. But while investment trusts that own offices have seen demand weaken after the growth of hybrid work, Digital Realty’s customers are data centers that appear poised for long-term growth. Jefferies estimated Digital Realty’s property revenue will go from under $4.7 billion in 2022 to more than $7.2 billion in 2026. The stock has been moving higher over the past week but still looks cheap based on its history, according to Petersen. DLR 1M mountain Shares of DLR rose after Nvidia’s earnings report in late May. “DLR’s stock is up +14% since NVDA ‘s earnings release, but the stock only trades at a 15.6x [adjusted funds from operations] multiple. This multiple is at a 7x turn discount to EQIX , and a 2.5x turn discount to the S & P 500 avg EPS multiple, both of which are near the largest discounts ever,” the note said. Jefferies has a buy rating and a price target of $129 per share for Digital Realty, or about 28% above where the stock closed Tuesday. — CNBC’s Michael Bloom contributed reporting.