Shares of Equinix (EQIX), a data center real estate trust (REIT), witnessed a significant surge in intraday trading on Thursday. This came on the heels of the company's strong performance, which was primarily due to the growing demand for artificial intelligence (AI) products. The company's first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a 5% increase from last year, bringing it to $992 million. Meanwhile, its adjusted funds from operations (AFFO) climbed 5.1% to $843 million, both metrics surpassing expectations.
Notwithstanding an earnings per share (EPS) of $2.43 just shy of estimates, the company's revenue went up by 6.5% to stand at $2.13 billion, a result consistent with forecasts. Equinix highlighted it had wrapped up 3,800 deals with over 3,100 customers during the reported period. It credited the boost in leasing, particularly in Europe, Middle East, and Africa, and Asia-Pacific markets, to the "accelerated hyperscale demand". This, according to the company statement, is largely due to the increasing activities around cloud and artificial intelligence (AI), which are driving demand higher.
Equinix CEO Charles Meyers indicated the high-intensity changes in the AI environment as an economic expansion catalyst. Further, Meyers noted the importance of digital initiatives as recognized by their customers, emphasizing the latter's role in contributing to long-term revenue growth and operational efficiency.
The company has projected its full-year revenue to be in the range of $8.69 billion to $8.79 billion, with an adjusted EBITDA of $4.04 billion to $4.12 billion, and AFFO of $3.29 billion to $3.37 billion dollars. Interestingly, despite the reported surge, Equinix shares, up by more than 11% to $771.86 on Thursday, still sit in the negative for the year.