May 1 (Reuters) -

Real estate investment trust Iron Mountain raised

its annual earnings forecast on Thursday, betting on surging

demand for its data center leases from businesses looking to

adopt artificial intelligence technologies.

Rival Equinix ( EQIX ), one of the largest data center

REITs, also lifted its annual revenue projection earlier this

week. The twin upgrades underscore growing appetite for digital

infrastructure as businesses race to modernize IT systems and

deploy generative AI tools.

"Our data center, digital and asset lifecycle management

(ALM) businesses are driving strong double digit organic revenue

gains and continue to have a long runway for growth," CEO

William Meaney said.

The Boston, Massachusetts-based Iron Mountain expects annual

revenue between $6.74 billion and $6.89 billion, above analysts'

average estimate of $6.71 billion, according to data compiled by

LSEG.

It also raised its forecast for annual adjusted funds from

operations (AFFO) to between $4.95 per share and $5.05 per

share, up from its prior range of $4.85 per share to $4.95 per

share.

Funds from Operations (FFO) is a key metric of cash flow for

REITs.

For the quarter ended March 31, the company posted revenue

of $1.6 billion, slightly above estimates. AFFO rose 8% to $348

million, or $1.17 per share, as its data center, digital, and

ALM segment grew more than 20% year-over-year.

Revenue from the company's traditional storage rental

business increased 7% to $948 million.

Iron Mountain counts cloud service providers such as Oracle

and Akamai Technologies ( AKAM ) among customers for

its data center leases.