HSBC thinks Equinix could see strong growth ahead thanks to strong demand for artificial intelligence data centers. “[Our] valuation looks attractive considering the company’s growth opportunity, especially as the three growth themes of digital transformation, cloud, and AI continue to benefit the data center industry over the next few years,” analyst Phani Kanumuri wrote on Thursday. The company operates as a real estate investment trust (REIT) that focuses primarily on data centers. Kanumuri upgraded the data center stock to buy from hold and raised his price target to $1,000 per share from $865. HSBC’s forecast implies more than 14% upside from Thursday’s close. EQIX YTD mountain Equinix stock. Data centers are an essential component of powering AI applications. The power-hungry technology tied to AI has sparked a race to buildout data centers, which has seen companies including Alphabet and Microsoft spend billions to accelerate growth . And while lower utilization rates remain a headwind for Equinix, Kanumuri said that the company has been able to charge more because its servers use more energy than others. “Higher-power densities from new cabinets compared to churned cabinets led to lower utilization in 2024,” Kanumuri said. “However, we see this as a value-accretive opportunity for Equinix to accelerate growth and improve revenue per data center in 2025.” Equinix stock has advanced roughly 9% in 2024. Analysts in general are bullish on the stock as well. Of the 27 covering Equinix, 21 rate it as a buy or a strong buy. Only six analysts have a hold rating on shares.
