Citi lowers Equinix stock price target to $950 on updated guidance

Citi lowered its price target on Equinix (EQIX) to $950 from $990, reflecting revised multi-year guidance, faster retail capacity expansion, moderated margin growth, and increased financing costs. Despite the reduction, Citi maintained its Buy rating, citing prospects for improved core recurring revenue performance, multi-year margin expansion weighted to later years, and potential valuation gap narrowing against Digital Realty Trust. This adjustment follows Equinix's recent Analyst Day, which generated mixed analyst reactions, with some highlighting long-term AI infrastructure growth potential while others expressed caution over near-term financial guidance, expansion costs, and demand uncertainties, particularly with significant improvements not expected until 2027 and beyond.

Analysis

Analyst sentiment on Equinix (EQIX) has become more cautious following its 2025 Analyst Day, where updated multi-year financial guidance prompted several price target revisions. Citi, for example, lowered its price target by 4% to $950 from $990, citing a faster pace of retail capacity expansion, moderated margin expansion, and higher financing costs on incremental debt. Despite this adjustment and a current 5.7% LTM revenue growth, Citi maintained its Buy rating, pointing to the long-term potential for improved core recurring revenue and the prospect of narrowing its valuation gap against peer Digital Realty Trust (DLR). This mixed outlook is broadly reflected across the Street; JPMorgan noted that disappointing financial guidance offset AI growth potential, while Stifel and KeyBanc highlighted concerns over expansion costs and increased capital spending impacting adjusted funds from operations (AFFO) growth. A key theme emerging from the guidance is that the anticipated benefits from AI infrastructure demand are back-end loaded, with significant improvements not expected to become visible until 2027 and beyond, creating a narrative of near-term headwinds versus long-term opportunity.

Key Decisions for Investors

• Long-term investors may view the current valuation as an entry point for exposure to AI infrastructure growth, but must be prepared for a holding period extending towards 2027 for the positive catalysts to fully materialize.
• Investors should closely monitor capital expenditures, financing costs, and adjusted funds from operations (AFFO) growth, as these metrics are the primary drivers behind the current cautious analyst sentiment and price target adjustments.
• Given the disappointing near-term guidance and mixed analyst ratings, the stock may face continued consolidation, and it is prudent to watch for signs of margin stabilization before increasing a position.
• The valuation gap between Equinix and its peer Digital Realty Trust (DLR) should be considered a key performance indicator, as a narrowing of this gap is a component of the bull thesis for several analysts.