Equinix, Inc. EQIX is well-positioned to capitalize on the exponential growth of artificial intelligence (AI) and digital transformation trends. It has recently collaborated with Dell Technologies to help enterprises deploy flexible and scalable AI infrastructure. 

EQIX announced a private AI solution enabling businesses to train AI models in scalable, cost-effective public and private cloud environments while maintaining better control, security and low-latency on-premises deployment. 

Its International Business Exchange (IBX) data centers integrate the Dell AI Factory with NVIDIA to deliver a comprehensive suite of products, solutions and services on a neutral, cloud-adjacent platform. This setup enables customers to securely and efficiently connect to public clouds, colocation facilities, private clouds and on-premises infrastructure.

With 260+ data centers across 70 metro areas, Equinix ensures that enterprises can maintain proximity to data sources and comply with local regulations. This global footprint, combined with a neutral, cloud-adjacent architecture, supports seamless scalability and integration of public and private clouds. These capabilities make Equinix a vital partner for businesses navigating the increasingly complex AI and cloud ecosystems. Equinix facilitates interconnection with more than 10,000 enterprises, including 2,000+ networks and 3,000 cloud and IT providers. 

Going forward, Equinix’s global data center portfolio is well-poised to gain from the solid demand for interconnected data center infrastructure. 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 upcoming years. Also, the company’s recurring revenue model assures steady revenues. Strategic expansion to capitalize on favorable industry trends, backed by a healthy balance sheet, is encouraging. However, a competitive landscape from other data centers and a debt burden raise concerns. High interest expenses add to its woes. 

Shares of Equinix have risen 20.5% over the past six months, outperforming the real estate market’s growth of 7.1%. EQIX currently carries a Zacks Rank #3 (Hold).

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Stocks to Consider

Some better-ranked stocks from the REIT sector are SL Green Realty SLG and Highwoods Properties, Inc. HIW. While SL Green sports a Zacks Rank #1 (Strong Buy), Highwoods carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SL Green’s 2024 FFO per share has been revised five cents north over the past week to $7.83.

The Zacks Consensus Estimate for Highwoods’ 2024 FFO per share has been raised a cent upward over the past month to $3.62.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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