Blackstone Digital Infrastructure Trust (BXDC) offers exposure to the growing data-center market, supported by strong demand and a large pipeline of potential acquisitions, Morgan Stanley said Wednesday in a report.

The opportunity is tempered by execution risk tied to the company's blind-pool structure and the absence of announced deals, Morgan Stanley said. Long-term leases with fixed annual rent increases may also limit upside if market rents rise faster, the report said.

The company is raising $2 billion of equity and aims to buy stabilized, income-producing data centers in the 20- to 100-megawatt range leased to investment-grade hyperscale tenants, Morgan Stanley said. Roughly $25 billion in potential acquisitions have been identified, the report said.

Given the focus on secured-power assets in major markets and long-term triple-net leases, Morgan Stanley projects adjusted funds-from-operations per-share growth of 8% annually from 2027 to 2030 in its base case.

Morgan Stanley initiated coverage of Blackstone Digital Infrastructure stock with an equal-weight rating and a $23 price target.

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