Investment Opportunities in Data Center Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy EQIX?
Source: Fool
- Industry Leader: Equinix operates the world's largest portfolio with over 260 data centers across 36 countries, providing more than 500,000 interconnections, establishing itself as the gold standard in the industry and attracting numerous AI clients, which will drive future revenue growth.
- Strong Customer Base: Digital Realty Trust serves over half of the Fortune 500 companies, reporting a 10% year-over-year increase in core FFO for 2025, along with a record backlog heading into 2026, indicating robust market demand.
- Market Transformation: Prologis is pivoting towards data centers, leveraging its 1.3 billion square feet of logistics space in prime locations to lower borrowing costs, positioning itself to benefit from upcoming data center investments.
- Attractive Valuations: Equinix and Digital Realty trade at approximately 24 times FFO, offering yields of 2% and 2.8% respectively, while Prologis trades at about 21 times expected 2026 FFO with a 3.2% yield, presenting a compelling entry point for investors.
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Analyst Views on EQIX
Wall Street analysts forecast EQIX stock price to fall
18 Analyst Rating
16 Buy
2 Hold
0 Sell
Strong Buy
Current: 965.950
Low
785.00
Averages
959.25
High
1218
Current: 965.950
Low
785.00
Averages
959.25
High
1218
About EQIX
Equinix, Inc. is a digital infrastructure company. The Company's platform, Equinix, combines a global footprint of International Business Exchange (IBX) and xScale data centers in the Americas, Asia-Pacific, and Europe, the Middle East and Africa (EMEA) regions, interconnection solutions, digital offerings, business and digital ecosystems and consulting and support. It offers a variety of enabling solutions that support a customer's need to implement, operate and maintain its colocated deployments. Its solutions include Equinix SmartView, Equinix Smart Hands, and Equinix Smart Build (ESB). Equinix SmartView is fully integrated monitoring software that provides customers visibility into the operating data relevant to their specific Equinix footprint. Its interconnection solutions connect businesses directly within and between its data centers across its global platform. Its interconnection solutions include Equinix Fabric, Equinix Fabric Cloud Router, Cross Connects, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Data Center Investment Surge: Equinix's Strong Performance
- Surge in Capital Expenditure: Top tech companies are projected to spend $602 billion on data center capital expenditures in 2023, reflecting a robust demand for AI-related products and services that is driving an infrastructure investment supercycle.
- Equinix's Strong Performance: As a real estate investment trust (REIT) focused on data centers, Equinix's stock has risen approximately 29% since the beginning of the year, and its recent earnings report revealed $9.2 billion in revenue, a 5% year-over-year increase, highlighting its critical role in meeting AI demand.
- Stable Revenue Streams: Equinix generates stable recurring revenue through monthly fees and one-time service charges, boasting a market capitalization of around $95 billion, making it one of the largest players in both real estate and data centers, appealing to income-seeking investors.
- Future Investment Plans: Equinix plans to invest between $4 billion and $5 billion annually through 2029, which may impact profits, yet its steady revenue stream and support for AI demand position it as a preferred long-term investment.
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- Market Sell-off Intensifies: The stock market experienced a significant sell-off as President Trump's comments on the Iran war led the Nasdaq to breach recent lows, indicating heightened investor concerns over geopolitical risks.
- Tech Stocks Underperform: Major tech stocks, including Meta, Microsoft, and Google, are breaking down, reflecting a waning investor confidence in their future growth prospects, which could impact short-term capital inflows into these companies.
- Investor Sentiment Deteriorates: The market's reaction to Trump's remarks suggests that investor sentiment is being negatively affected by concerns over potential conflict, likely leading to further capital outflows from risk assets.
- Economic Outlook Uncertainty: As market sensitivity to geopolitical developments increases, the outlook for economic recovery becomes more uncertain, potentially affecting corporate investment decisions and consumer confidence.
See More
Trump's Iran War Comments Trigger Market Sell-Off
- Market Reaction: The Nasdaq index fell below recent lows following President Trump's comments on the Iran war, indicating heightened investor sensitivity to geopolitical risks, which could further erode market confidence.
- Tech Stocks Decline: Major tech companies like Meta, Microsoft, and Google experienced significant stock price drops, reflecting market concerns about their future growth prospects, potentially impacting their short-term investment appeal.
- Investor Sentiment Shift: The sell-off indicates a sharp shift in investor sentiment, which may lead to capital outflows from tech stocks, thereby affecting overall market liquidity and stability.
- Geopolitical Risk Escalation: Trump's remarks intensified market worries regarding the Middle East situation, potentially prompting investors to reassess their risk asset allocations, which could influence future investment decisions.
See More
Retirees Must Beware of AI Bubble Risks
- AI Bubble Risks: As the AI frenzy cools, retirees must be cautious with their AI stock holdings, particularly those with poor profitability and increasing losses, such as SentinelOne, a $5 billion company whose losses are widening despite revenue growth, posing greater risks for investors.
- Emerging Winners: The next phase of the AI revolution will reward companies providing cost-effective AI solutions, like data centers Equinix and Digital Realty, which generate stable monthly revenue and can offer reliable dividends, with Equinix's quarterly per-share dividend having grown nearly 80% over the past five years.
- Power Solutions Demand: With increasing electricity needs from data centers, onsite power solution providers like Bloom Energy are gaining attention, as their solid oxide fuel cells can provide electricity at lower costs than the national grid, with projections indicating that about one-third of data centers will use 100% onsite power by 2030.
- Transition Planning Necessity: Retirees should develop a transition plan to shift from popular AI stocks to lesser-known AI companies poised for future success, such as Nice, which reported 13% revenue growth in its cloud business last year and is expected to benefit from rising demand for autonomous customer service agents.
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EQUINIX INCREASES INVESTMENTS IN GLOBAL DATA CENTER WORKFORCE TRAINING
Expansion of Investments: Equinix is expanding its investments in global data center development to enhance its service offerings.
Focus on Workforce Development: The company is also prioritizing workforce development to support its growing operations in the data center sector.
See More
Vertiv Partners with Nvidia to Enhance Cooling Technology
- Strengthened Partnership: Vertiv's partnership with Nvidia, established last month, will see Vertiv provide advanced liquid cooling systems for Nvidia's data centers, enhancing Vertiv's position in the data center cooling market while addressing the urgent cooling needs of AI hardware.
- Impressive Financial Performance: In Q4 2025, Vertiv's new orders surged by 252%, and its backlog increased by 109% to $15 billion, indicating strong market demand for its products and solidifying its leadership in the rapidly growing AI infrastructure sector.
- Expansive Market Outlook: According to Grand View Research, the data center cooling market is expected to grow at a CAGR of 22.3% from 2026 to 2033, reaching a size of $128.31 billion by 2033, providing robust market support for Vertiv's long-term growth.
- Strong Financial Health: Vertiv currently boasts a net profit margin of 13% and a debt-to-equity ratio of 0.82, reflecting its solid financial health, and with a current PEG ratio of 0.86, the stock appears undervalued considering future earnings projections, attracting investor interest.
See More
Data Center Investment Surge: Equinix's Strong Performance
- Surge in Capital Expenditure: Top tech companies are projected to spend $602 billion on data center capital expenditures in 2023, reflecting a robust demand for AI-related products and services that is driving an infrastructure investment supercycle.
- Equinix's Strong Performance: As a real estate investment trust (REIT) focused on data centers, Equinix's stock has risen approximately 29% since the beginning of the year, and its recent earnings report revealed $9.2 billion in revenue, a 5% year-over-year increase, highlighting its critical role in meeting AI demand.
- Stable Revenue Streams: Equinix generates stable recurring revenue through monthly fees and one-time service charges, boasting a market capitalization of around $95 billion, making it one of the largest players in both real estate and data centers, appealing to income-seeking investors.
- Future Investment Plans: Equinix plans to invest between $4 billion and $5 billion annually through 2029, which may impact profits, yet its steady revenue stream and support for AI demand position it as a preferred long-term investment.
See More
Trump's Iran War Comments Trigger Market Sell-off
- Market Sell-off Intensifies: The stock market experienced a significant sell-off as President Trump's comments on the Iran war led the Nasdaq to breach recent lows, indicating heightened investor concerns over geopolitical risks.
- Tech Stocks Underperform: Major tech stocks, including Meta, Microsoft, and Google, are breaking down, reflecting a waning investor confidence in their future growth prospects, which could impact short-term capital inflows into these companies.
- Investor Sentiment Deteriorates: The market's reaction to Trump's remarks suggests that investor sentiment is being negatively affected by concerns over potential conflict, likely leading to further capital outflows from risk assets.
- Economic Outlook Uncertainty: As market sensitivity to geopolitical developments increases, the outlook for economic recovery becomes more uncertain, potentially affecting corporate investment decisions and consumer confidence.
See More
Trump's Iran War Comments Trigger Market Sell-Off
- Market Reaction: The Nasdaq index fell below recent lows following President Trump's comments on the Iran war, indicating heightened investor sensitivity to geopolitical risks, which could further erode market confidence.
- Tech Stocks Decline: Major tech companies like Meta, Microsoft, and Google experienced significant stock price drops, reflecting market concerns about their future growth prospects, potentially impacting their short-term investment appeal.
- Investor Sentiment Shift: The sell-off indicates a sharp shift in investor sentiment, which may lead to capital outflows from tech stocks, thereby affecting overall market liquidity and stability.
- Geopolitical Risk Escalation: Trump's remarks intensified market worries regarding the Middle East situation, potentially prompting investors to reassess their risk asset allocations, which could influence future investment decisions.
See More
Retirees Must Beware of AI Bubble Risks
- AI Bubble Risks: As the AI frenzy cools, retirees must be cautious with their AI stock holdings, particularly those with poor profitability and increasing losses, such as SentinelOne, a $5 billion company whose losses are widening despite revenue growth, posing greater risks for investors.
- Emerging Winners: The next phase of the AI revolution will reward companies providing cost-effective AI solutions, like data centers Equinix and Digital Realty, which generate stable monthly revenue and can offer reliable dividends, with Equinix's quarterly per-share dividend having grown nearly 80% over the past five years.
- Power Solutions Demand: With increasing electricity needs from data centers, onsite power solution providers like Bloom Energy are gaining attention, as their solid oxide fuel cells can provide electricity at lower costs than the national grid, with projections indicating that about one-third of data centers will use 100% onsite power by 2030.
- Transition Planning Necessity: Retirees should develop a transition plan to shift from popular AI stocks to lesser-known AI companies poised for future success, such as Nice, which reported 13% revenue growth in its cloud business last year and is expected to benefit from rising demand for autonomous customer service agents.
See More
EQUINIX INCREASES INVESTMENTS IN GLOBAL DATA CENTER WORKFORCE TRAINING
Expansion of Investments: Equinix is expanding its investments in global data center development to enhance its service offerings.
Focus on Workforce Development: The company is also prioritizing workforce development to support its growing operations in the data center sector.
See More
Vertiv Partners with Nvidia to Enhance Cooling Technology
- Strengthened Partnership: Vertiv's partnership with Nvidia, established last month, will see Vertiv provide advanced liquid cooling systems for Nvidia's data centers, enhancing Vertiv's position in the data center cooling market while addressing the urgent cooling needs of AI hardware.
- Impressive Financial Performance: In Q4 2025, Vertiv's new orders surged by 252%, and its backlog increased by 109% to $15 billion, indicating strong market demand for its products and solidifying its leadership in the rapidly growing AI infrastructure sector.
- Expansive Market Outlook: According to Grand View Research, the data center cooling market is expected to grow at a CAGR of 22.3% from 2026 to 2033, reaching a size of $128.31 billion by 2033, providing robust market support for Vertiv's long-term growth.
- Strong Financial Health: Vertiv currently boasts a net profit margin of 13% and a debt-to-equity ratio of 0.82, reflecting its solid financial health, and with a current PEG ratio of 0.86, the stock appears undervalued considering future earnings projections, attracting investor interest.
See More
