Wanting major upside and exposure to the artificial intelligence (AI) megatrends? Then look no further than the ASX 200 stock in this article.
That's the view of analysts at Macquarie Group Ltd (ASX: MQG), which have named it as their most preferred small to mid-cap investment idea.
Which ASX 200 stock?
The stock that Macquarie is recommending to clients is DigiCo Infrastructure REIT (ASX: DGT).
It describes itself as a global leader in carrier and cloud-neutral digital infrastructure, delivering secure, scalable, and high-performance data centre, cloud, and connectivity solutions across Australia and North America.
The ASX 200 stock highlights that its facilities support enterprise, government, and hyperscale customers, enabling low-latency, high-reliability operations with seamless access to global networks and cloud platforms.
This essentially leaves it well-positioned to benefit from the incredible demand for data centre capacity to support the AI boom.
Property sector re-rating
Macquarie is feeling positive about the listed property sector and feels that the stage is set for a potential re-rating. It said:
More favourable credit conditions, asset value corrections and improving income fundamentals have seen incremental investment RoE expectations strengthening. Replacement cost above current valuations due to the significant increase in construction costs continues to limit supply and thereby improves the rental growth outlook, particularly in retail and core CBD office.
In the 12-months to Sep-25, Australian commercial real estate transactions across retail, office and industrial increased +10% to $29bn. Retail is the standout sector, with $10bn in transactions up +30%. However, the largest historical contributor to total volumes, office, lags at $7bn down -13%.
It also notes that REITs have balance sheet capacity to make accretive acquisitions. Macquarie adds:
Reported gearing levels are typically middle of the target gearing range for A-REITs. Deployment of balance-sheet capacity to the upper end of target gearing has the potential to deliver upside to earnings growth. The upside can be further enhanced via capital partnering and funds management strategies.
Major upside potential
Macquarie believes this ASX 200 stock is dirt cheap at current levels.
According to the note, the broker has an outperform rating and $4.16 price target on DigiCo Infrastructure REIT.
Based on its current share price of $2.65, this implies potential upside of 57% for investors over the next 12 months.
Macquarie also expects a 12 cents per share dividend in FY 2026. This equates to a 4.5% dividend yield, lifting the total potential return beyond 60%.
