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Equinix Stock Rises 11.8% Quarter to Date: Will the Trend Last?
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Key Takeaways
EQIX stock is up 11.8% QTD, outpacing the real estate market's 2.2% gain.
With openings and acquisitions, EQIX's IBX data center facilities reach 270 in Q1 2025.
In Q1 2025, EQIX maintained $7.6B of liquidity. Raised dividends five times over the past five years.
Shares of Equinix, Inc. (EQIX - Free Report) have gained 11.8% in the quarter-to-date period compared with the real estate market’s growth of 2.2%.
The robust demand for data center infrastructure amid enterprises’ growing reliance on technology and acceleration in digital transformation strategies has aided this Zacks Rank #2 (Buy) stock in recent years. Its strategic expansion efforts, backed by a healthy balance sheet, have enabled it to capitalize on favorable industry trends so far.
Image Source: Zacks Investment Research
Let us now decipher the possible factors behind the surge in the stock price.
In a world where digital transformation is paramount, Equinix continues to prove itself to be a pivotal player in the global digital infrastructure landscape. Its 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.
Its 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. For 2025, we expect recurring revenues to increase 3.8% on a year-over-year basis. Higher revenues and lower costs will likely expand margins and increase profitability in the long run.
Equinix continues focusing on acquisitions and developments to expand data center capacity in key markets and strengthen its competitive positioning and global reach. 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, as of March 31, 2025. Moreover, Equinix has an encouraging development pipeline. As of April 30, 2025, it had 56 major builds underway across 33 markets in 24 countries, including 12 xScale builds.
Equinix focuses on enjoying financial flexibility, and 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, a BBB rating from S&P Global Ratings and a BBB+ rating from Fitch Ratings as of the end of the first quarter of 2025, rendering it favorable access to the debt market.
Moreover, solid dividend payouts are a massive attraction for REIT investors, and Equinix has remained committed to that. EQIX 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 and a healthy financial position, its dividend distribution is expected to be sustainable over the long run.
With the factors mentioned above, the positive trend in the stock is expected to continue in the near term.
The Zacks Consensus Estimate for VICI’s 2025 FFO per share has moved one cent northward to $2.35 over the past week.
The Zacks Consensus Estimate for MPW’s 2025 FFO per share has moved one cent northward to 57 cents over the past two months.
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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Equinix Stock Rises 11.8% Quarter to Date: Will the Trend Last?
Key Takeaways
Shares of Equinix, Inc. (EQIX - Free Report) have gained 11.8% in the quarter-to-date period compared with the real estate market’s growth of 2.2%.
The robust demand for data center infrastructure amid enterprises’ growing reliance on technology and acceleration in digital transformation strategies has aided this Zacks Rank #2 (Buy) stock in recent years. Its strategic expansion efforts, backed by a healthy balance sheet, have enabled it to capitalize on favorable industry trends so far.
Image Source: Zacks Investment Research
Let us now decipher the possible factors behind the surge in the stock price.
In a world where digital transformation is paramount, Equinix continues to prove itself to be a pivotal player in the global digital infrastructure landscape. Its 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.
Its 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. For 2025, we expect recurring revenues to increase 3.8% on a year-over-year basis. Higher revenues and lower costs will likely expand margins and increase profitability in the long run.
Equinix continues focusing on acquisitions and developments to expand data center capacity in key markets and strengthen its competitive positioning and global reach. 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, as of March 31, 2025. Moreover, Equinix has an encouraging development pipeline. As of April 30, 2025, it had 56 major builds underway across 33 markets in 24 countries, including 12 xScale builds.
Equinix focuses on enjoying financial flexibility, and 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, a BBB rating from S&P Global Ratings and a BBB+ rating from Fitch Ratings as of the end of the first quarter of 2025, rendering it favorable access to the debt market.
Moreover, solid dividend payouts are a massive attraction for REIT investors, and Equinix has remained committed to that. EQIX 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 and a healthy financial position, its dividend distribution is expected to be sustainable over the long run.
With the factors mentioned above, the positive trend in the stock is expected to continue in the near term.
Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and Medical Properties Trust (MPW - Free Report) , each carrying a Zacks Rank #2 at present. 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 $2.35 over the past week.
The Zacks Consensus Estimate for MPW’s 2025 FFO per share has moved one cent northward to 57 cents over the past two months.
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.