Data Center Operator Equinix Soars on AI Demand

Equinix (EQIX) shares jumped in intraday trading Thursday, a day after the data center real estate trust (REIT) posted strong results on the soaring demand for artificial intelligence (AI) products.

Adjusted EBITDA, AFFO Better Than Expected

The company reported first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was up 5% year-over-year to $992 million, and adjusted funds from operations (AFFO) gained 5.1% to $843 million. Both were more than anticipated.

Earnings per share (EPS) of $2.43 missed estimates. Revenue rose 6.5% to $2.13 billion, in line with forecasts.

‘Accelerated Hyperscale Demand’

Equinix noted it closed 3,800 deals with more than 3,100 customers. It added that “accelerated hyperscale demand” led to increases in leasing in Europe, Middle East, and Africa and Asia-Pacific markets, “as continued cloud and artificial intelligence (AI) activity drives strong demand.”

Chief Executive Officer (CEO) Charles Meyers said the “rapidly evolving AI landscape” remains a catalyst for economic expansion, and that creates immense potential for Equinix “as our customers recognize the importance of digital initiatives in driving long-term revenue growth and operational efficiency.”

The company predicted full-year revenue to be $8.69 billion to $8.79 billion, with adjusted EBITDA of $4.04 billion to $4.12 billion, and AFFO of $3.29 billion to $3.37 billion.

Equinix shares were up more than 11% to $771.86 as of 12:17 p.m. ET Thursday but remain in negative territory for the year.