Equinix, Inc. (NASDAQ:EQIX) is one of Goldman Sachs’ top REIT stock picks. On January 26, JPMorgan reiterated an Overweight rating on Equinix, Inc. (NASDAQ:EQIX) with a $950 price target. According to the investment bank, the company is well-positioned to benefit from pricing strength and new lease signings. Equinix (EQIX): Positioned for Growth in the Evolving Data Center Market Consequently, the investment bank has raised its 2026 revenue and profitability estimates for Equinix, driven by anticipated p ...

With all the interest and hype around the massive requirement for data centers (DCs), many investors are looking for ways to quickly profit from the phenomenon. Risk is, however, emerging in the ecosystem as companies like Blue Owl Capital (I'm an optimist. I look forward to a brighter future. As the world evolves so must our investment style. Opportunities are everywhere but having the right mindset, being humble and having a can do, never stop learning attitude is critical to success. We can beat the mark ...

Group 1 - The growing demand for data centers (DCs) is attracting significant investor interest, but risks are emerging within the ecosystem [1] - Companies like Blue Owl Capital are highlighted as part of the evolving investment landscape in the data center sector [1] Group 2 - The investment approach emphasizes the importance of a positive mindset, humility, and a commitment to continuous learning for success in a volatile market [1]

Group 1: Investment Trends in Hyperscale Cloud Computing - Hyperscale cloud computing companies, including Google, Amazon, and Microsoft, are projected to invest approximately $500 billion in capital expenditures this year [1] - Google anticipates an investment of $175 billion to $185 billion by 2026, a significant increase from $91.5 billion last year, driven by the need for enhanced AI computing power [1] Group 2: Equinix's Growth and Strategy - Equinix, a leading data center REIT, is rapidly expanding its global data center platform to accommodate the growth of hyperscalers and other clients, potentially doubling its value in the coming years [2] - As of the end of Q3, Equinix operates 273 data centers across 77 markets in 36 countries, supporting over 10,000 customers, including major tech firms [3] - The demand for space in Equinix's portfolio is strong, with record annualized bookings of $394 million in Q3, reflecting a 25% year-over-year increase [4] Group 3: Expansion Plans and Financial Projections - Equinix is pursuing a "build bolder" strategy, currently managing 58 major projects globally, including 12 AI-ready xScale data centers [5] - The REIT aims to double its data center capacity by 2029, with plans to invest $4 billion to $5 billion annually from 2026 to 2029, up from the previous guidance of $3.5 billion to $3.9 billion [6] - This investment strategy is expected to support robust revenue growth, adjusted funds from operations (FFO), and dividend growth in the upcoming years [6]

Core Viewpoint - Equinix (EQIX) is expected to report quarterly earnings of $9.07 per share, a 14.5% increase year-over-year, with revenues projected at $2.47 billion, reflecting a 9.2% year-over-year growth [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 2.7% in the last 30 days, indicating analysts' reassessment of their initial estimates [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts project 'Revenues- Non-recurring revenues' to reach $184.81 million, marking an 8.7% year-over-year increase [5]. - 'Revenues- Recurring revenues' are expected to be $2.28 billion, with a year-over-year change of 9% [5]. - 'Revenues- Recurring revenues- Managed infrastructure' is estimated at $119.09 million, reflecting a 3.6% increase from the previous year [6]. - 'Revenues- Recurring revenues- Colocation' is forecasted to be $1.69 billion, indicating an 8.9% year-over-year growth [6]. Geographic Revenue Estimates - The consensus for 'Geographic Revenues- Americas' is $1.11 billion, showing an 11% increase from the prior year [7]. - 'Geographic Revenues- Europe- Recurring- Managed infrastructure' is expected to reach $38.68 million, a 13.8% increase year-over-year [7]. - 'Geographic Revenues- EMEA' is projected at $819.56 million, reflecting a 5.6% year-over-year change [7]. Other Key Metrics - 'Geographic Revenues- Americas- Recurring- Other' is estimated at $5.06 million, indicating a significant decline of 27.7% year-over-year [8]. - 'EMEA - Cabinet Equivalent Capacity' is forecasted to be 139,883, up from 138,200 year-over-year [8]. - 'Americas - Quarter End Utilization' is expected to be 80.9%, slightly down from 81.0% the previous year [8]. - 'Americas - Cabinet Equivalent Capacity' is projected at 154,467, an increase from 144,100 year-over-year [9]. - 'Asia-Pacific - Cabinet Billing' is expected to reach 68,687, up from 66,600 in the same quarter last year [9]. Stock Performance - Over the past month, Equinix shares have returned +3.3%, contrasting with the Zacks S&P 500 composite's -1.5% change [9].

Core Viewpoint - Equinix (EQIX) is set to report its earnings on February 11, 2026, with projected earnings per share (EPS) of $9.07, reflecting a 14.52% increase year-over-year, and revenue expected to be $2.47 billion, indicating a 9.18% growth compared to the same quarter last year [2]. Group 1: Earnings and Revenue Projections - The Zacks Consensus Estimates suggest full-year earnings of $38.48 per share and revenue of $9.26 billion, marking changes of +9.88% and 0% from the previous year [3]. - Recent analyst revisions indicate a positive outlook for Equinix, reflecting optimism about the company's business and profitability [3]. Group 2: Stock Performance and Valuation - Equinix's stock closed at $810.38, down 1.29% from the previous session, while it has gained 7.44% prior to this trading day, outperforming the Finance sector's loss of 0.18% and the S&P 500's gain of 0.74% [1]. - The company currently trades at a Forward P/E ratio of 20.21, which is a premium compared to the industry average Forward P/E of 13.64 [6]. - Equinix has a PEG ratio of 1.14, which is lower than the average PEG ratio of 2.72 for the REIT and Equity Trust - Retail industry [7]. Group 3: Industry Context - The REIT and Equity Trust - Retail industry, part of the Finance sector, holds a Zacks Industry Rank of 78, placing it in the top 32% of over 250 industries [8].

The world's top hyperscalers could spend more than $500 billion to expand their artificial intelligence (AI) infrastructure this year, according to Goldman Sachs' (NYSE: GS) and FactSet's latest estimates. That's more than double their $237 billion in capex in 2024, and that figure should keep climbing over the next few years as the AI market expands. There are plenty of ways to capitalize on that AI boom. However, Equinix (NASDAQ: EQIX) is one of the simplest and safest plays on that secular expansion, ...

Summary of Data Center Infrastructure and AI Demand Industry Overview - The report focuses on the **Data Center Real Estate Investment Trusts (REITs)** and the broader **AI infrastructure landscape**. - Demand for data center capacity has surged, with **5.8GW** of capacity leased in North America in **4Q25**, leading to a total absorption of **15.6GW** for the year, more than double the **~7GW** in **2024** [2][45]. Key Demand Insights - The demand pipeline in the U.S. is projected at **~26GW**, driven by **11GW** of hyperscale self-build capacity currently in development [2]. - Major players like **Oracle**, **Meta**, and **AWS** are increasing their leasing activities, particularly in tertiary markets [2]. - Forward demand signals are positive, with significant AI infrastructure projects reaching operational capacity targets of **1GW** [3][21]. Supply Constraints - Supply constraints are becoming more acute, with grid interconnection queues extending to **6+ years** in most markets and data center vacancy rates at historic lows of **<2%** [4][60]. - The adoption of **Bring Your Own Generation (BYOG)** approaches is expected to increase, particularly for larger campus locations [4]. - Labor scarcity is a growing concern, with each **GW** build requiring **3-7K** workers, while the labor pool is only growing by **~24K** per year [4][9]. Data Center REITs Outlook - The report maintains a constructive outlook on data center REITs, particularly **Digital Realty (DLR)** and **Equinix (EQIX)**, due to tight industry conditions that are expected to drive pricing higher [5][9]. - **DLR** is projected to see **7.4%** growth in FFO/share for **2026E**, supported by hyperscale leasing and mark-to-market opportunities [8]. - **EQIX** is expected to achieve **8.6%** normalized recurring revenue growth in **2026E**, with shares trading at a discounted valuation [8]. AI Infrastructure Developments - The race to **Artificial General Intelligence (AGI)** is intensifying, with major AI infrastructure projects ramping up to meet the demands of new models [9][14]. - Upcoming releases of models trained on **Blackwell systems** and the rollout of **Rubin** in **2H26** are expected to significantly impact power density and data center designs [3][41]. - The current environment is characterized by the development of greenfield data center facilities to support higher power and compute-intensive workloads [9]. Financial Projections - Hyperscale capital expenditures are projected to reach **~$585B** in **2026**, a nearly **40%** increase from previous estimates [46]. - Incremental cloud revenues are expected to rise to **$106B** in **2026**, up from **$69B** in **2025** [50]. Conclusion - The data center market is experiencing unprecedented growth driven by AI demand, with significant investments and developments expected in the coming years. However, supply constraints and labor shortages pose challenges that could impact the pace of growth. The outlook for established data center REITs remains positive, supported by strong demand and pricing dynamics.

Core Insights - Applied Digital has experienced significant stock growth, with a nearly 540% increase over the past 12 months, driven by rapid growth and new leases [1] - The company plans to spin off its unprofitable cloud-based AI infrastructure platform, which is seen as a competitor to its own customers [2] - Equinix is presented as a more stable investment option for long-term income investors, offering reliable dividends and stable profits [7] Applied Digital Overview - From fiscal 2022 to fiscal 2025, Applied Digital's revenue increased from $8.5 million to $144.2 million, excluding its cloud business [3] - The company has secured $16 billion in lease payments over the next 15 years, primarily from CoreWeave [3] - Despite expansion efforts, analysts predict Applied Digital will remain unprofitable post-spin-off of its cloud business [4] Equinix Overview - Equinix operates over 270 data centers with a total capacity of approximately 1 GW, making it one of the largest data center REITs [8] - The company serves over 10,000 customers and generates significantly more revenue than Applied Digital, with a gross margin of 30.89% [9][10] - Equinix has consistently raised its dividend payout since becoming an REIT, currently offering a forward dividend yield of 2.3% [11] Financial Performance - Equinix's revenue and EPS grew at CAGRs of 10% and 19% from 2020 to 2024, with expectations for continued growth [11][13] - For 2025, Equinix anticipates an adjusted funds from operations (AFFO) per share increase of 8%-11%, easily covering its dividend rate [12] - Analysts project revenue and EPS growth of 6% and 74%, respectively, for the current year, with further growth expected from 2025 to 2027 [13]

Group 1 - The core viewpoint is that artificial intelligence (AI) represents a significant technological revolution, and investing in AI is expected to create substantial wealth [1] - There are alternative investment opportunities in AI beyond chipmakers and software developers, particularly in data centers, which are crucial for AI infrastructure [2] - Equinix is identified as the largest data center owner, making its stock an attractive option amid high valuations in other AI sectors [2] Group 2 - Equinix operates as a real estate investment trust (REIT) focused on commercial real estate assets, specifically data centers [4] - Data centers serve as the physical infrastructure for the internet and generative AI applications, providing secure environments for essential computing components [5] - Equinix has a portfolio of 273 data centers, serving over 10,000 customers, including major companies like Nvidia and Adobe, with more than 60% of Fortune 500 companies as clients [6] Group 3 - The demand for data centers has surged, with global AI data center spending reaching $236 billion last year, projected to exceed $1 trillion annually by 2030 [7] - Equinix's recent quarterly results indicate strong demand growth, with bookings increasing by 25% to an all-time high, supported by a solid balance sheet and significant liquidity [8] - The stock of Equinix is considered to have a reasonable valuation relative to its growth opportunities in the AI sector [9]