While the market is glued to the buzz around tech giants and AI, many have kept their eyes on the “Magnificent Seven.”
Yet behind every innovation, there’s a “physical layer” that makes it all possible. These are data centres. Think of them as the physical homes of the cloud services, AI, and every connected service we use.
At a US$78 billion market cap, Equinix is the largest data centre REIT in the world. Founded in 1998, this data centre giant has found incredibly steady growth in its top line numbers.
It has since been riding the waves of internet and tech development. It’s also one of the most reliable compounders in digital infrastructure.
Despites its massive assets in data centres, shares of Equinix fell by 16% year to date.
Is this a bargain today? This is what you need to know about how it sustains its growth.
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Equinix’s consistent growth and strong operational performance
Let’s take a look at some numbers. During its latest third quarter results, Equinix reported revenues of US$2.3 billion.
This was 5% higher compared to its previous year. What’s more, operating income grew by 12% y/y – a solid 20% operating margin.
Behind Equinix’s steady performance is its extensive data centre and interconnection portfolio. Today, it has over 270 data centres, and more than 499,000 interconnections.
This spans the entire globe. In fact, there’s an Equinix data centre in every major technology hub.
Today, Equinix produces 75% of its revenues from its two most valuable businesses – colocation and interconnection segments.
During its latest quarter, Colocation revenue has grown 7% y/y to US$1.6 billion, driven by steady demand for Equinix’s services, which has remained steady.
Moreover, hit a record US$394 million in annualised gross bookings. This is up 25% y/y.
This demand is diversified across Equinix’s large customer base. Within the quarter, it closed over 4,400 deals with more than 3,400 customers.
This is spread across various industries, including healthcare, automotives, financial services and so on.
Equinix is riding the AI infrastructure boom
Equinix is investing into staying relevant to AI. During the quarter, Equinix launched its Distributed AI solution.
It has leveraged its interconnectivity strengths to enhance support for inferencing workloads. This was announced during its first ever AI Summit earlier in September 2025.
Meanwhile, Equinix plans to double its data centre capacity by 2029. Total capacity has reached three gigawatts, which is a metric to measure data centre capacity.
It has 58 projects currently underway. And recently added seven new projects.
For its interconnection offerings, it has added more than 7,100 interconnections in the quarter. This is across both physical and virtual connections.
According to Equinix, this is driven by “accelerated hyperscaler integration and strategic diversification”. This brings its global total to over 499,000.
More interconnection offerings draw in companies who are connecting their AI training workloads.
In all, these various efforts will continue to anchor Equinix’s relevance in this AI boom.
What I’m watching for 2025
Management lowered its FY2025 revenue outlook. This was reduced by US$15 million owing to currency headwinds.
The guidance range was adjusted from around US$9.23 billion – US$9.33 billion, to US$9.2 billion – US$9.32 billion.
For its upcoming 4Q2025 results, management expects revenue to be within the US$2.4 billion to US$2.5 billion. This is a US$153 million increase from the current quarter.
Equinix expects a greater than US$60 million recurring step up with a non-recurring increase relating to a large deal at their xScale sites.
xScale is Equinix’s hyperscale data centre initiative. It targets large cloud and enterprise customers requiring high-capacity deployments.
One other interesting piece management said during their earnings call was the rise in pre-sales business.
This refers to when bookings are made for data centres that are still being built, and hence not live yet. For Equinix, it recently extended the period for its sales team to sell retail capacity ahead of delivery.
Previously, this was a three to six month window. Now, it has extended to twelve months. Meaning, the sales teams are able to sell a whole year ahead before the data centre is live.
The pre-sale business has risen through the course of 2025 according to management.
I believe this represents a good opportunity for the company to have a better projection into demand and revenues. While locking in customer opportunities early, it also gives Equinix better control over cash flow.
My final thoughts
Equinix is the quiet compounder powering the AI revolution. Its results show steady revenue growth, a globally irreplaceable network, and it’s deeply embedded in the digital economy.
In my view, this is why Equinix has remained a winner in tech infrastructure. Today, demand for AI workloads, cloud traffic expands and connectivity is rising rapidly.
And Equinix is positioned to benefit from every bit of data that flows through this new digital era.
