AI Demand Skyrockets S&P 500 REIT xScale Portfolio Value, Surpasses $8 Billion Mark

• Data center landlord Equinix (EQIX) leads the S&P 500 after surpassing earnings forecasts with strong AI and cloud demand.
• Equinix reported a 3.1% YoY increase in adjusted funds from operations to $8.86 per share, beating forecasts of $8.59 per share.
• The company closed 3,800 deals across more than 3,100 customers during the quarter, with cloud and AI activity driving strong demand.

Equinix, a data center REIT, outperforms earnings forecasts, driven by robust demand for AI and cloud services, marking 85 consecutive quarters of top-line growth.

Equinix’s Financial Performance

Equinix, a Redwood City, Calif.-based REIT specializing in data centers and internet infrastructure, reported a 6% rise in revenue to $2.13 billion, although it fell slightly short of estimates of $2.14 billion. Despite this, the company marked its 85th consecutive quarter of top-line growth, the longest streak of any company in the S&P 500.

Strong Demand for AI and Cloud Services

In the quarter, Equinix closed 3,800 deals across more than 3,100 customers. The company noted that the continued activity in cloud and artificial intelligence was a significant driver of demand. On April 15, Equinix partnered with PGIM Real Estate on a $600 million joint venture to develop and operate the first xScale data center in the U.S., competing with the likes of Amazon Web Services, Microsoft Azure, and Google Cloud.

Equinix’s Future Outlook

Equinix guided 2024 revenues between $8.692 billion and $8.792 billion, up 6% to 7% from last year. The company expects adjusted funds from operations to increase 7% to 10% in 2024 to range from $34.45 to $35.29 per share. The Wall Street consensus forecast is $34.96 per share.

Conclusion

Equinix’s strong performance, driven by robust demand for AI and cloud services, has positioned it as a leader in the S&P 500. The company’s strategic partnerships and continued growth in its operations indicate a promising future outlook. However, investors should keep an eye on the company’s performance against Wall Street’s forecasts.