Equinix, Inc.

(NASDAQ Global Select)
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Bullish +55

Digital Realty vs. Equinix: Which AI Data-Center REIT Is the Better Buy?

AI infrastructure Cloud expansion Company update AI-generated analysis

πŸ“ˆ Digital Realty second-quarter revenue surged 29% to $1.9 billion, reflecting strong demand for powered data-center capacity.

πŸ’° Digital Realty raised its 2026 core FFO-per-share guidance range to $8.15-$8.20, excluding net promote income.

🀝 Equinix reported an 11% year-over-year increase in monthly recurring revenue and 18% growth in normalized AFFO per share.

πŸ—οΈ Digital Realty signed two new hyperscale leases in July, adding $205 million of annualized rent at its share.

πŸ’΅ Equinix expects 2026 AFFO-per-share growth between 10% and 12% with adjusted EBITDA margins around 51%.

πŸ“‰ Digital Realty trades at approximately 22 times its 2026 core FFO guidance, offering a lower multiple than peers.

🏦 Equinix carries about 4.9 times net debt to EBITDA and trades near 24 times its 2026 AFFO-per-share guidance.

πŸ“Š D.E. Shaw increased its stake in Digital Realty by 43% to 1.54 million shares in the second quarter.

πŸ”’ Equinix maintains a strong moat through network density and interconnection ecosystem advantages.

⚠️ Both companies face execution risks related to heavy development spending and potential capital raises.

Bullish Signals
  • Equinix reported an 11% year-over-year increase in monthly recurring revenue, demonstrating strong demand for its interconnection ecosystem.
  • Normalized constant-currency AFFO per share rose 18% in the second quarter, highlighting operational efficiency and pricing power.
  • Management raised guidance for 2026 AFFO-per-share growth to between 10% and 12%, signaling confidence in future earnings expansion.
  • Equinix maintains adjusted EBITDA margins around 51%, reflecting high-quality, durable cash flows from its data-center assets.
  • Coatue Management increased its stake in Equinix by 17% to 1.27 million shares, indicating strong institutional conviction.
Risk Factors
  • Equinix carries a net debt-to-EBITDA ratio of about 4.9 times, which is higher than Digital Realty's 4.7 times and may constrain flexibility.
  • The company trades at a premium valuation near 24 times its 2026 AFFO-per-share guidance compared to Digital Realty's 22x multiple.
Full Analysis
Digital Realty Trust (DLR) and Equinix (EQIX) are compared as leading data-center REITs positioned to benefit from the AI boom, with both facing tighter power and permitting constraints. Digital Realty reported a 29% rise in second-quarter revenue to $1.9 billion, driven by strong leasing momentum including two new hyperscale leases adding $205 million in annualized rent. Equinix demonstrated robust growth with an 11% increase in monthly recurring revenue and an 18% rise in normalized AFFO per share, supported by its network density and interconnection ecosystem. Management forecasts 2026 revenue growth of 11-12% and AFFO growth of 10-12%, maintaining adjusted EBITDA margins around 51%. Valuation analysis reveals Digital Realty trades at roughly 22 times its 2026 core FFO guidance, while Equinix trades near 24 times its 2026 AFFO-per-share guidance. Professional investors increased holdings in both companies during Q2, with D.E. Shaw significantly boosting its stake in Digital Realty and Coatue Management increasing its position in Equinix.