American Tower (NYSE:AMT) is a real estate investment trust (REIT). The company owns and operates many of the towers that power cell networks. However, American Tower is expanding its business into adjacent markets, and that growth strategy has the potential to supercharge its performance in the coming years.

In this Backstage Pass video, which was recorded Oct. 29, 2021, Motley Fool contributor Travis Hoium discusses American Tower's third-quarter earnings, and he explains why cloud computing and 5G technology could be tailwinds for this real estate company. Fool contributor Brian Withers is also in this clip.

Brian Withers: We are up with American Tower.

Travis Hoium: Yeah. It's like what the tower company, that's really a technology company. This was interesting report from them today. Results were really solid. Revenue was up 22% to $2.45 billion, which beat estimates. Earnings per share, 2.49, up 12% year-over-year.

The company increased their guidance also for the full year, expecting a little over $9 billion dollars in revenue, and $2.6 to $2.66 billion in net income.

If you're not familiar with what this company does, they own the towers that a lot of the cellphone equipment sits on. Currently, mostly 4G equipment. But what they're moving into is 5G. That's really where they're seeing a lot of their growth coming from, now and in the future as well. Those towers seemed to be a little bit more dense for a lot of the 5G applications. They're also moving into data centers. If you think about edge computing, that's really where they're expecting a lot of growth to come from.

If you're doing your computing at the edge, you don't want to send that information 100 miles away to a data center, like AWS. That might be where a lot of computing is going on right now. Those locations need to be a little bit closer to customers. They're also going to be serving a number of smaller players on the edge compute space that maybe don't want to build their own data center. That's really a growth market for them.

What's interesting with a company like this is that it's really an infrastructure and real estate company. But if you listen to their earnings call, they're talking a lot about next-generation technologies that are taking place with 5G, AR, VR, autonomous vehicles, and then that edge computing space. That's why you see really solid numbers from them.

They were really helped this quarter by a large acquisition. That's why you see those revenue numbers up significantly more than the earnings per share. But they're expecting more dense 5G will help their growth, more edge data centers will help. A lot of tailwinds for them, despite the cellphone business being relatively mature.

There's a lot of changes from an infrastructure point that they're going to have to change over the next handful of years and so that gives them a lot of opportunity to grow, especially as -- you know, companies like Verizon and AT&T have spent billions of dollars on things like spectrum; they don't have necessarily the funds to build out their own towers, and so they put that on companies like American Tower.

Brian Withers: Yeah. I look at the stock chart there and it might be a little disappointing to investors to see over the last 12 months that this company has trailed the market. But I used to own the stock and I sold it in 2011. I've decided to look at the return since I sold it. It's up 400%. That's not even including the dividends. I guess I could buy it back. There's a ton of things going on still for the company. Are you a shareholder?

Travis Hoium: I'm not a shareholder, but looking into results like this, if you're interested in cloud computing, the edge, 5G, which I think these are going to be enormous growth areas for the next decade. This is a really great way to play it, because you don't have to take specific risks on whether one company or another is going to have the right strategy. You can just play this infrastructure layer.

This is an area that isn't going anywhere. Their counterparties are typically pretty big companies, pretty established companies. They've got a solid cash flow there and like you said, they pay a dividend. And organic growth, 4.9% -- I mean, that's pretty solid for a tower company and a data center company. A lot to like there from American Tower.

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