2Q26: Investing for Growth – Reiterate OW and Top Pick

Research evidence excerpt

2Q26: Investing for Growth – Reiterate OW and Top Pick

IdeaMwas in line with estimates and total ’26 revenue growth guidance raised by 50bps to

10.7% - 11.6% y/y and increased its AFFO/share growth outlook to 11.4% - 12.9%.

Longer term, Equinix raised its ’27 - ’29 targets from the prior analyst day last June

and now expects 10% - 13% annual revenue growth, a 53%+ adjusted EBITDA margin

by '29, $5bn - $7bn of annual capex, and 9% - 12% annual AFFO/share growth.

Equinix highlighted four distinct enterprise AI use cases emerging across its

customer base:

• Stack: Enterprises are running open models on private AI infrastructure to

reduce token costs.

• Sovereign: Enterprises are deploying sovereign AI stacks to satisfy data

residency and compliance requirements.

• Batch: Customers are deploying AI "centers of excellence" and AI factories for

model training and batch inferencing at Equinix.

• Latency sensitive: Enterprises are placing inference infrastructure within

specific metros to reduce latency and lower data backhaul costs.

Capex was again increased to accelerate capacity delivery: Equinix incurred $1.6bn of

capex in 2Q, bringing 1H26 spending to approximately $2.8bn, and raised its 2026

total capex guidance to $5.0bn - $6.0bn from our prior estimate of $4.1bn. Roughly

90% of quarterly capex was directed toward expansion, with Equinix planning to

double cabinet deliveries in 2H and accelerate more than 7,000 cabinets

previously scheduled for 2027 into 4Q26 (see Exhibit 2 for our expansion

tracker). Equinix plans to increase leverage by approximately a turn by '29, and we

model an increase in net debt of ~$13bn and net debt / EBITDA by YE29 at ~4.7x.

Notably, it continues to expect ~25% cash-on-cash returns within three to four years