Equinix, Inc. (EQIX): A Bull Case Theory

We came across a bullish thesis on Equinix, Inc. on Magnar's Substack. In this article, we will summarize the bulls’ thesis on EQIX. Equinix, Inc.'s share was trading at $801.31 as of January 13th. EQIX’s trailing and forward P/E were 72.05 and 48.54 respectively according to Yahoo Finance.

Equinix, Inc. (NASDAQ: EQIX) stands as the global leader in digital infrastructure, operating more than 260 data centers across over 75 metro areas, serving 10,000+ customers including hyperscalers, cloud providers, and enterprises. Despite a steep share price decline in 2025 due to macro uncertainty and rising capital expenditures, the company’s fundamentals remain strong, supported by accelerating demand from AI and digital transformation. Equinix derives 94% of its revenue from recurring streams, primarily through colocation (74% of revenue) and interconnection (18.6%), both of which benefit from multi-year contracts and growing customer interconnectivity.

Its dense network of over 480,000 cross connections across 35 countries drives network effects and high switching costs, resulting in customer retention exceeding 95%. Equinix’s ongoing expansion strategy—targeting to double capacity by 2029—anchors future growth, with capex expected to rise to $4–5 billion annually to develop AI-optimized, high-density data centers. The company’s scale, geographic reach, and ecosystem differentiation provide durable competitive advantages and justify its premium valuation relative to peers.

Based on a blended EV/EBITDA and P/AFFO approach, the company’s fair value estimates suggest potential upside of 25.8% by 2027 and 50.7% by 2029. Equinix also demonstrates strong ESG leadership, achieving 96% renewable energy usage, a 24% reduction in emissions since 2019, and an AAA MSCI rating. With over $7 billion in green bond issuances and sustained operational excellence, Equinix remains well-positioned to benefit from the ongoing global digital infrastructure build-out, offering investors a compelling mix of resilience, growth, and sustainability.

Previously we covered a bullish thesis on Simon Property Group, Inc. (SPG) by David in April 2025, which highlighted its disciplined capital structure, strong free cash flow, and growing dividends that provide stability for long-term investors. The company's stock price has appreciated approximately by 24.53% since our coverage. The thesis still stands as SPG’s resilient model remains intact. Magnar shares a similar thesis but emphasizes Equinix’s recurring revenue and global data center growth.

Equinix, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held EQIX at the end of the second quarter which was 70 in the previous quarter. While we acknowledge the potential of EQIX 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 best short-term AI stock.

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Disclosure: None.