Equinix hit with downgrades as AI-driven expansion squeezes near-term growth
Investing.com -- Equinix Inc fell after Raymond James and BMO Capital Markets each downgraded the data-centre operator, warning that a costly plan to double capacity for artificial-intelligence workloads will dent earnings growth and cash generation over the next two years.
The stock was down 8.4% at $754.81 in afternoon trading.
Raymond James cut Equinix (NASDAQ:EQIX) to market perform from strong buy, saying the company is embarking on a multi-year shift that includes annual capital spending of $4-5 billion, about $1 billion above Wall Street's prior expectations. This amount of change in a short period of time never comes without challenges, the brokerage wrote, pointing to softer revenue and funds-from-operations (AFFO) growth and a lower return-on-capital outlook through 2026.
BMO likewise moved to market perform from outperform and slashed its price target to $850 from $1,045. The firm said Equinix's forecast for 5-9% average annual AFFO-per-share growth from 2025-29, including just 5% in 2026, underwhelmed against rising investment. It expects leverage to rise to about 4.5 times as the company issues roughly $8 billion of new debt to fund expansion.
Both brokers acknowledged long-term benefits from the spending spree, which is designed to meet surging demand for AI inference and higher-density computing. Equinix plans to deliver 350 megawatts of new capacity in 2027 and as much as 500 MW a year in 2028-29, while targeting EBITDA margins above 52% later in the decade.
Though RJ said investors may view the strategy as 'reactive' until evidence of faster growth emerges, and BMO prefers rival Digital Realty (NYSE:DLR), which it rates outperform, for exposure to the sector in the near term.
Equinix trades at about 19.5 times expected 2026 EBITDA, a slight discount to Digital Realty, but the downgraded brokers see limited catalysts for the shares until revenue and cash-flow trajectories re-accelerate.
Related articles
Equinix hit with downgrades as AI-driven expansion squeezes near-term growth
Core Scientific shares rally as CoreWeave rekindles acquisition talks
UBS bumps Meta target by $129 on AI revenue from messaging, assistant tools
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
17 minutes ago
- Business Insider
Kepler Capital Reaffirms Their Buy Rating on Ferrari (RACE)
In a report released on June 25, Thomas Besson from Kepler Capital maintained a Buy rating on Ferrari (RACE – Research Report), with a price target of €470.00. The company's shares closed yesterday at $477.54. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, Besson is a 2-star analyst with an average return of 0.1% and a 57.21% success rate. Besson covers the Industrials sector, focusing on stocks such as Renault, Compagnie Générale des Établissements Michelin, and Forvia. In addition to Kepler Capital , Ferrari also received a Buy from Barclays's Henning Cosman in a report issued on June 25. However, on the same day, Deutsche Bank maintained a Hold rating on Ferrari (NYSE: RACE). RACE market cap is currently $112.6B and has a P/E ratio of 49.90. Based on the recent corporate insider activity of 41 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RACE in relation to earlier this year.
Yahoo
36 minutes ago
- Yahoo
Oklo Subsidiary Begins Work on Radioisotope Production Facility at Idaho National Lab
Oklo Inc. (NYSE:OKLO) is one of the best-performing NYSE stocks to buy now. On June 17, Oklo announced that its subsidiary called Atomic Alchemy Inc., has commenced site characterization work for a commercial radioisotope production facility at the Idaho National Laboratory/INL. This marks a significant step in Oklo's plans to expand its advanced nuclear facilities and establish a reliable domestic supply of critical radioisotopes. The site characterization activities involve core borings to collect soil and rock samples. The data is crucial for understanding the subsurface composition, which ensures the facility meets stringent safety and building code requirements and supports the design of a robust structural foundation. The milestone builds on Atomic Alchemy's prior approvals and agreements. An aerial view of a power plant, symbolizing the company's investments in energy infrastructure sector. Oklo acquired Atomic Alchemy in an all-stock transaction valued at $25 million in February 2025. The company aims to address the global shortage of critical radioisotopes, which are vital for various applications, such as life-saving diagnostics, targeted cancer therapies, AI chip manufacturing, national security, and advanced research and development. Research Nester projects the radioisotope market to reach $55.7 billion by 2026, with significant demand growth expected over the next decade. Oklo Inc. (NYSE:OKLO) develops advanced fission power plants to provide clean, reliable, and affordable energy at scale to customers in the US. While we acknowledge the potential of OKLO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the . READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
44 minutes ago
- Business Wire
Suriname: TotalEnergies Acquires 25% Interest in Block 53
PARIS--(BUSINESS WIRE)-- TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has signed an agreement to acquire the 25% interest held by Moeve (formerly known as CEPSA) in Block 53, offshore Suriname, joining APA (45%, operator) and Petronas (30%) as partner in this license. Block 53 lies directly east of Block 58, where TotalEnergies (40%*, operator) and its partners announced the Final Investment Decision for the GranMorgu development in October 2024. Block 53 contains the Baja-1 discovery, drilled near the border of Block 58. 'This acquisition brings new resources to the development of our low-cost and low-emission GranMorgu project', said Javier Rielo, Senior Vice President Americas, Exploration & Production at TotalEnergies. 'It also proves how TotalEnergies will leverage GranMorgu infrastructure to develop profitably additional resources and extend its production plateau, strengthening the position of the Company in the offshore of Suriname'. * After 20% Staatsolie (NOC) back-in *** About TotalEnergies TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas, biogas and low-carbon hydrogen, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations. @TotalEnergies TotalEnergies TotalEnergies TotalEnergies Cautionary Note The terms 'TotalEnergies', 'TotalEnergies company' or 'Company' in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words 'we', 'us' and 'our' may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies' financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC). TotalEnergies Media Relations: +33 (0)1 47 44 46 99 l presse@ l @TotalEnergiesPR Investor Relations: +33 (0)1 47 44 46 46 l ir@
