Equinix's AI-Driven Narrative Overlooks Critical Execution and Financing Headwinds

What happened

A recent Seeking Alpha article portrays Equinix as a premier data center investment with stable growth and AI tailwinds, suggesting it's reasonably priced. However, DeepValue's analysis of SEC filings reveals escalating risks, including unaccrued capex commitments surging to $6.7 billion and power availability issues threatening project timelines. While Equinix demonstrates strong interconnection growth and bookings, a delayed campus lease and revenue forecast cut in October 2025 underscore persistent timing volatility. The market's focus on AI demand is crowded, but the real gating factors are power access and financing flexibility, with leverage metrics like net debt to EBITDA at 4.61 raising concerns. Thus, despite the optimistic portrayal, the stock at $832.54 lacks a margin of safety, necessitating proof of timely execution before considering an investment.

Implication

The Seeking Alpha article's bullish stance ignores Equinix's substantial capex commitments and power constraints, which could delay revenue and strain finances. High leverage and interest coverage of 2.99 make Equinix vulnerable to financing market shifts, especially with $16.6 billion in senior notes maturing soon. Recent guidance cuts and deal slippage indicate that near-term growth is more dependent on timing than underlying demand, increasing investment uncertainty. Emerging regulatory scrutiny and grid access challenges add operational risks that could hinder expansion and margin goals. Therefore, aligning with DeepValue's 'WAIT' rating, investors should monitor key catalysts like the Feb 2026 guidance and consider entry only below $760 for a better risk-reward balance.

Thesis delta

The article advocates buying Equinix based on its market position and growth prospects, but this analysis reinforces a cautious stance due to unaddressed execution and financing risks. The thesis remains unchanged: wait for evidence of power-secured project deliveries and stabilized large-deal timing before investing, as current valuation does not compensate for these uncertainties.