Equinix raises annual results forecast on Wednesday, signaling robust demand for its data center services, sending its shares up 3% after the bell.
REITs support diverse real and virtual activities, and WELL, EQIX, EQR, and WPC are likely to reflect that strength in their upcoming earnings.
EQIX's Q1 earnings are likely to have gained from growing demand for data centers with increasing digitization, though high interest expenses might have hurt.
Equinix (EQIX) remains a strong candidate due to its recurring revenue model, despite recent underperformance and legal challenges from a Hindenburg Research report. Equinix has maintained 88 consecutive quarters of revenue growth, although recent growth has slowed to high single digits. The company's margins are robust, with a 47% adjusted EBITDA margin, and over 90% of its revenue is recurring, making it resilient in downturns.
Investors looking for ways to find stocks that are set to beat quarterly earnings estimates should check out the Zacks Earnings ESP.
Investors need to pay close attention to Equinix (EQIX) stock based on the movements in the options market lately.
When looking to invest in data centers and AI, there are a lot of potential routes to go down. These include hyperscaler firms, advanced semiconductor designers, AI app developers, and semiconductor equipment makers.
EQIX secures its first renewal energy PPA in Japan to support sustainability goals and pursue decarbonization objectives.
Equinix's valuation had become unreasonable due to strong AI sector tailwinds, leading to a Sell rating despite strong fundamentals in January. EQIX's share price has declined 15% from its peak, returning to a more rational valuation midpoint with forward FFO per share now at 30x. Shifting demand in the data center sector, particularly from large tech companies like Microsoft, has tempered the previously unlimited growth expectations.
Equinix faces risks from a potential slowdown in hyperscaler demand, especially after Microsoft's recent comments, making the data center industry vulnerable to shifts in AI investment. Despite strong operational performance and record bookings, Equinix's aggressive growth projections for FY'26 and beyond appear overly optimistic. Rising competition and the capital-intensive nature of the business pose additional risks, with Equinix's high valuation multiples being hard to justify.
Equinix, Inc. (NASDAQ:EQIX ) Citi 2025 Global Property Conference March 3, 2025 2:10 PM ET Company Participants Adaire Fox-Martin – President and Chief Executive Officer Conference Call Participants Nick Joseph – Citi Research Mike Rollins – Citi Research Nick Joseph [Call Starts Abruptly] Global Property CEO Conference. I'm Nick Joseph here with Mike Rollins with Citi Research.
Examine the evolution of Equinix's (EQIX) overseas revenue trends and their effects on Wall Street's forecasts and the stock's prospects.