Equinix

Data Centre REIT that could both suffer and benefit from the Data Centre Slowdown

Please read disclaimer at bottom of writeup - this report is not investment advice

Introduction

Equinix, Inc. (NASDAQ: EQIX) has been one of the more striking beneficiaries of the artificial intelligence infrastructure cycle, with shares closing around $1,064 in mid-June 2026, up roughly 39 per cent year-to-date and delivering a three-year total shareholder return of approximately 49 per cent. The stock touched an all-time high of $1,128.68 in late April 2026, and the company now carries a market capitalisation of approximately $105 billion against a backdrop of record bookings and sustained margin expansion.

The relevance of Equinix to the AI boom is frequently misunderstood. Unlike the gas turbine and grid equipment manufacturers that have become the most obvious ‘pick and shovel’ beneficiaries of the data centre build-out, General Electric Vernova foremost among them, Equinix does not sell capital equipment into data centres. It is the data centre, and more specifically it is the connective tissue between thousands of enterprises, clouds, and networks that increasingly need to sit physically close to one another. Where GE Vernova profits from the construction wave as hyperscale campuses are built, Equinix profits from the operational wave that follows: the persistent, recurring need for interconnection and low-latency compute as artificial intelligence moves from training, which is concentrated in remote hyperscale campuses, to inference, which is distributed and proximity-dependent. Management estimates that AI-related demand now represents 50 to 60 per cent of Equinix’s largest bookings, up from roughly half a year earlier, and eight of the top ten AI model providers and four of the top five neoclouds are actively expanding within the Equinix platform.

This report sets out our updated view of Equinix’s position. We examine the company’s growth over the past three years, the scale and quality of its new development pipeline, the economics of its existing site portfolio and whether rents and energy costs are likely to move in the company’s favour, the industry-wide data centre construction slowdown and its asymmetric effect on Equinix relative to peers, the evolution of returns on invested capital, and the capital expenditure programme that will determine whether the current valuation can be justified looking forward.