Equinix (EQIX) Stock Forecast & Price Target

Equinix has demonstrated solid financial performance, with a revenue increase to $8.2 billion, reflecting an 8% year-over-year growth on a constant currency basis, accompanied by an expansion in EBITDA margins by 160 basis points. The company reported an adjusted funds from operations (AFFO) of $3.4 billion, showing an 11% increase year-over-year, which translates to an AFFO per share of $34.99, up 9%. Furthermore, underlying demand remains robust, as evidenced by a growth in organic cabinet net adds and a significant leasing activity that reflects high operational utilization, contributing positively to the overall business outlook.

Equinix's projected revenue growth for FY25 is considered subdued due to increased competition from hyperscalers, ongoing high capital expenditures, and low free cash flow, as well as risks related to overbuilding and pricing pressures within the data center market. The company faces challenges from a slowdown in enterprise cloud adoption and the broader global economic environment, which could adversely affect its customer base. Key risk factors include high reinvestment needs, the potential for industry overbuilding, and pressures associated with adopting neutral Internet exchanges, all of which contribute to a negative outlook for Equinix's stock performance.