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5 Reasons That Make Equinix Stock a Solid Portfolio Pick Now
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Key Takeaways
EQIX benefits from strong digital transformation trends and growing global demand for data exchange.
In the last three years, over 90% of EQIX's monthly recurring revenue bookings came from existing customers.
EQIX is expanding globally with 270 IBX centers in 35 countries and 56 major builds underway in 24 countries.
In a world where digital transformation is paramount, Equinix (EQIX - Free Report) continues to prove itself to be a pivotal player in the global digital infrastructure landscape.
Analysts also seem bullish on this Zacks Rank #2 (Buy) stock. The estimate revision trend for 2025 funds from operations (FFO) per share indicates a favorable outlook for the company, with estimates moving north over the past month.
In the past month, shares of Equinix have gained 0.5%, compared to the real estate market’s upside of 0.6%. Given its solid fundamentals and positive estimate revisions, the stock is likely to keep performing well in the quarters ahead.
Image Source: Zacks Investment Research
What Makes Equinix a Solid Pick?
Solid Market Fundamentals: Enterprises and service providers’ continued efforts to integrate artificial intelligence (AI) into their strategies and offerings and advance their digital transformation agendas are likely to keep demand up in the near term. Amid this, Equinix’s geographically diverse portfolio of IBX data centers is expected to benefit from enterprises’ increasing dependence on technology and the expedited implementation of digital transformation strategies.
Growth in Revenue Base: Equinix's business generates a substantial portion of monthly recurring revenue bookings (greater than 90% of total revenues in the last three years) from existing customers. The company generated 36% of its recurring revenues from its 50 largest customers in the first quarter of 2025. Given the growing demand for data exchanges worldwide, Equinix is well-poised to grow its revenue base. Higher revenues, along with lower costs, will expand margins and increase profitability in the long run. We estimate recurring revenues to increase 3.8% in 2025 on a year-over-year basis.
Expansion Efforts: Equinix continues focusing on acquisitions and developments to expand data center capacity in key markets and strengthen its competitive positioning and global reach. In February 2025, Equinix opened its first IBX data center in Jakarta, Indonesia, to meet the increasing digital infrastructure and connectivity needs in Southeast Asia. In July 2024, Equinix entered into an agreement to acquire three data centers in the Philippines for $180 million from Total Information Management. The deal is expected to close in the third quarter of 2025. The company’s recent IBX data center openings and acquisitions, as well as xScale data center investments, have increased its total number of IBX data center facilities to 270 in 35 countries, as of March 31, 2025.
Moreover, Equinix has an encouraging development pipeline. As of the end of the first quarter of 2025, it had 56 major builds underway across 33 markets in 24 countries, including 12 xScale builds.
Balance Sheet Strength: Equinix’s robust balance sheet position enables it to capitalize on long-term growth opportunities. As of March 31, 2025, the company’s liquidity totaled $7.6 billion. Moreover, it enjoyed investment-grade credit ratings of Baa2 from Moody’s, BBB from S&P Global Ratings, and BBB+ from Fitch Ratings as of the end of the first quarter of 2025, rendering it favorable access to the debt market.
Dividend: Solid dividend payouts remain the biggest attraction for REIT investors, and Equinix has remained committed to that. Moreover, Equinix has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 13.07%. Given a robust operating platform, healthy financial position and a lower dividend payout (compared to its industry), its dividend distribution is expected to be sustainable over the long run.
The Zacks Consensus Estimate for VICI’s 2025 FFO per share has moved one cent northward to $2.34 over the past month.
The consensus estimate for WPC’s 2025 FFO per share has been revised upward by 1% to $4.88 over the past month.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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5 Reasons That Make Equinix Stock a Solid Portfolio Pick Now
Key Takeaways
In a world where digital transformation is paramount, Equinix (EQIX - Free Report) continues to prove itself to be a pivotal player in the global digital infrastructure landscape.
Analysts also seem bullish on this Zacks Rank #2 (Buy) stock. The estimate revision trend for 2025 funds from operations (FFO) per share indicates a favorable outlook for the company, with estimates moving north over the past month.
In the past month, shares of Equinix have gained 0.5%, compared to the real estate market’s upside of 0.6%. Given its solid fundamentals and positive estimate revisions, the stock is likely to keep performing well in the quarters ahead.
Image Source: Zacks Investment Research
What Makes Equinix a Solid Pick?
Solid Market Fundamentals: Enterprises and service providers’ continued efforts to integrate artificial intelligence (AI) into their strategies and offerings and advance their digital transformation agendas are likely to keep demand up in the near term. Amid this, Equinix’s geographically diverse portfolio of IBX data centers is expected to benefit from enterprises’ increasing dependence on technology and the expedited implementation of digital transformation strategies.
Growth in Revenue Base: Equinix's business generates a substantial portion of monthly recurring revenue bookings (greater than 90% of total revenues in the last three years) from existing customers. The company generated 36% of its recurring revenues from its 50 largest customers in the first quarter of 2025. Given the growing demand for data exchanges worldwide, Equinix is well-poised to grow its revenue base. Higher revenues, along with lower costs, will expand margins and increase profitability in the long run. We estimate recurring revenues to increase 3.8% in 2025 on a year-over-year basis.
Expansion Efforts: Equinix continues focusing on acquisitions and developments to expand data center capacity in key markets and strengthen its competitive positioning and global reach. In February 2025, Equinix opened its first IBX data center in Jakarta, Indonesia, to meet the increasing digital infrastructure and connectivity needs in Southeast Asia. In July 2024, Equinix entered into an agreement to acquire three data centers in the Philippines for $180 million from Total Information Management. The deal is expected to close in the third quarter of 2025. The company’s recent IBX data center openings and acquisitions, as well as xScale data center investments, have increased its total number of IBX data center facilities to 270 in 35 countries, as of March 31, 2025.
Moreover, Equinix has an encouraging development pipeline. As of the end of the first quarter of 2025, it had 56 major builds underway across 33 markets in 24 countries, including 12 xScale builds.
Balance Sheet Strength: Equinix’s robust balance sheet position enables it to capitalize on long-term growth opportunities. As of March 31, 2025, the company’s liquidity totaled $7.6 billion. Moreover, it enjoyed investment-grade credit ratings of Baa2 from Moody’s, BBB from S&P Global Ratings, and BBB+ from Fitch Ratings as of the end of the first quarter of 2025, rendering it favorable access to the debt market.
Dividend: Solid dividend payouts remain the biggest attraction for REIT investors, and Equinix has remained committed to that. Moreover, Equinix has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 13.07%. Given a robust operating platform, healthy financial position and a lower dividend payout (compared to its industry), its dividend distribution is expected to be sustainable over the long run.
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - Free Report) , each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI’s 2025 FFO per share has moved one cent northward to $2.34 over the past month.
The consensus estimate for WPC’s 2025 FFO per share has been revised upward by 1% to $4.88 over the past month.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.