In the latest trading session, American Tower (AMT) closed at $184.13, marking a -0.67% move from the previous day.
On January 29, 2025, the Federal Open Market Committee paused its recent spate of interest rate cuts, leaving the overnight borrowing rate at 4.25%-4.5%. The move comes after three consecutive rate cuts in the final months of 2024.
In the latest trading session, American Tower (AMT) closed at $183.63, marking a -1.77% move from the previous day.
American Tower Corporation stock presents a strong buy opportunity under current conditions. The gap between its earnings potential and valuation discount has become too extreme. Analysts predict a strong profit recovery with a 41% FFO sequential growth for the upcoming quarter.
American Tower AMT shareholders have faced a jittery environment in recent months due to the significant headwinds it faced in India and Latin America, affecting its growth prospects in these regions. The sale of its troubled Indian tower operations to Data Infrastructure Trust, an Infrastructure Investment Trust backed by a Brookfield Asset Management (BAM) affiliate, weighed on its third-quarter performance.
Data center REITs have become the largest property sector, driven by AI demand and digital technology proliferation, making them core positions in market cap weighted ETFs. Digital Realty and Equinix are leading data center REITs with strong balance sheets, diversified customer bases, and robust growth prospects, though current valuations suggest waiting for better entry points. Other investment options include Iron Mountain, American Tower, and COPT Defense Properties, all benefiting from the growing need for data center capacity and offering attractive dividend yields.
American Tower's recent sell-off has been well warranted, with it triggering the improved entry points, richer dividend yields, and double digits upside potential. Much of the outperformance is linked to the growing 5G buildouts along with double digits data center growth for three consecutive years, with 2025 bringing forth increased capacity. Given the last tranche of TMUS churn and recent exit from India markets, we believe that AMT is likely to report robust sequential growth moving forward.
When investing for income, there is usually a choice between high yield with weak income growth and low yield with strong income growth. When the yields are not too high and the fundamentals are robust, the expectation could be that there will be some form of income growth. Yet, this might not always be the case.
American Tower (AMT) concluded the recent trading session at $179.19, signifying a +1.14% move from its prior day's close.
The commercial real estate sector, valued at $26 trillion, offers diverse opportunities despite low growth and commoditized assets, with REITs providing accessible and liquid investment options. Rising interest rates have pressured REIT performance, yet current valuations present attractive opportunities, especially in sectors like data centers, telecommunications, and warehousing. Despite a challenging 2024, REITs remain financially robust with low leverage and strong access to capital, positioning them well for a potential rebound.
Over 15 years, I've seen the REIT sector evolve, allowing small investors to own diverse properties like cell towers, data centers, and casinos. Inspired by Warren Buffett, I analyze REITs by their competitive advantages and financials, focusing on those with wide moats and trading at a margin of safety. My Top 10 REITs for 2025 include EastGroup, Terreno Realty, Rexford Industrial, VICI Properties, American Tower, Realty Income, Ryman Hospitality, Alexandria Real Estate, Americold, and NNN REIT.
While issues over the past year affected AMT's growth, there are several opportunities for reacceleration.