Morgan Stanley initiates coverage of Equinix with Overweight, Digital Realty Trust with Equal-weight

[Equinix headquarters building]
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Morgan Stanley initiated coverage of the data center operator Equinix (NASDAQ:EQIX [https://seekingalpha.com/symbol/EQIX]) with an Overweight rating and Digital Realty Trust (NYSE:DLR [https://seekingalpha.com/symbol/DLR]) with an Equal-weight rating.

For Equinix, analysts Cameron McVeigh and Benjamin Swinburne said in a research note, "We see opportunity for revenue and AFFO/share growth to accelerate from '26E to '29E as capital investment steps up to service growing industry demand."

"We see Equinix's recently announced long-term guidance as achievable and see an opportunity for multiple re-rating as the market gains confidence. In addition, we are bullish on the network effects and stickier tenant base enabled by its uniquely scaled interconnection ecosystem, which helps de-risk the forecast," said the note.

Morgan Stanley's rating on Equinix aligns with the average sell-side analysts [https://seekingalpha.com/symbol/EQIX/ratings/sell-side-ratings] and Seeking Alpha authors [https://seekingalpha.com/symbol/EQIX/ratings/author-ratings] rating of Buy. SA's Quant Rating [https://seekingalpha.com/symbol/EQIX/ratings/quant-ratings] system sees the stock as Hold.

"While we see nearly double digit revenue growth and AFFO / share growth ahead at DLR, we see that growth largely reflected in expectations," said the analysts.

"Longer-term, we see risk to shares that a flat or deflationary pricing environment returns if the hyperscaler tenant base is able to again exert leverage over DC (data center) operators," said the research note.

The rating on DLR aligns with the Quant [https://seekingalpha.com/symbol/DLR/ratings/quant-ratings] rating of Hold. Meanwhile, SA authors [https://seekingalpha.com/symbol/DLR/ratings/author-ratings] and Wall Street analysts [https://seekingalpha.com/symbol/DLR/ratings/sell-side-ratings] grade the stock as Buy.

MORE ON EQUINIX, DIGITAL REALTY TRUST

* Equinix: A Data-Center REIT Expected To Keep Powering An AI-Driven Future [https://seekingalpha.com/article/4828533-equinix-a-data-center-reit-expected-to-keep-powering-an-ai-driven-future]
* Digital Realty Trust Analysis: Financial Health And Opportunity In Preferred Stock [https://seekingalpha.com/article/4825625-digital-realty-trust-analysis-financial-health-and-opportunity-in-preferred-stock]
* Digital Realty Trust, Inc. (DLR) Presents at Global Communications Infrastructure Conference Transcript [https://seekingalpha.com/article/4823736-digital-realty-trust-inc-dlr-presents-at-global-communications-infrastructure-conference]
* Equinix launches new products - Distributed AI infrastructure, others [https://seekingalpha.com/news/4498795-equinix-launches-new-products---distributed-ai-infrastructure-others]
* Equinix opens first AI-ready data center in India's Chennai [https://seekingalpha.com/news/4496526-equinix-opens-first-ai-ready-data-center-in-indias-chennai]