Equinix Hold Rating: Balancing Long-Term Growth Potential with Near-Term AFFOps Challenges

BMO Capital analyst Ari Klein downgraded the rating on Equinix (EQIX – Research Report) to a Hold today, setting a price target of $850.00.

Ari Klein has given his Hold rating due to a combination of factors that reflect both opportunities and challenges for Equinix. The company’s recent Analyst Day revealed a promising long-term growth potential, yet the anticipated growth in Adjusted Funds from Operations per share (AFFOps) from 2025 to 2029 was less impressive than expected, with a particularly low forecast for 2026. This underwhelming outlook is partly due to increased investments as Equinix expands its infrastructure to meet future AI inference demand, which is expected to dampen near-term growth prospects.
While Equinix’s revenue growth forecast for the same period was slightly better than anticipated, the AFFOps target fell short of previous expectations, indicating a more conservative growth trajectory. The significant rise in capital expenditures, projected to reach $4-5 billion annually from 2026 to 2029, is expected to exert additional pressure on AFFOps, contributing to a more cautious stance. Given these dynamics, Klein has opted for a Hold rating, suggesting a preference for other opportunities in the data center sector, such as those offered by Digital Realty Trust (DLR), which currently holds an Outperform rating.