Equinix shares fall as revenue, capital spending forecast disappoint investors
Equinix's shares fell 8 per cent on Thursday after the data center firm forecast revenue growth below expectations and projected heavy investments to cater to AI demand in the long term.
The company plans to double its current capacity over the next five years to capitalize on the growing demand for infrastructure to meet the surge in artificial intelligence use.
Shares of peers Iron Mountain, Digital Realty and Core Scientific fell between 2 per cent and 3 per cent.
Equinix is ramping up investments to expand its infrastructure for rising AI inference demand. While this is expected to drive stronger growth in the long run — potentially crossing 10 per cent by 2030 — near-term growth will remain modest, BMO Capital Markets analysts said in a note.
It expects its annual revenue to grow 7 per cent to 10 per cent from 2025 to 2029, slightly lower than its prior forecast.
Meanwhile, it updated its forecast for adjusted funds from operations (AFFO) per share growth to 5 per cent to 9 per cent now from 7 per cent to 10 per cent, which disappointed investors.
To position for growing AI inference demand, Equinix plans to increase annual capital spending to $4 billion to $5 billion from 2026 to 2029, up from $3.3 billion in 2025.
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