Equinix Gains as Data Center REITs Rally on Rate Bets and AI Demand

Executive Summary

• Data center REITs advance as investors price in lower U.S. rates and rising AI-driven leasing, with shares of Equinix and Digital Realty up roughly 3–6% over recent sessions, according to market data trackers Reuters.
• Analysts flag stronger 2026 AI infrastructure outlays, with hyperscale capex projected to grow in the mid-teens, according to recent industry updates from Dell’Oro Group and CBRE.
• Iron Mountain and American Tower trade higher on continued leasing momentum and interconnection demand, while GDS Holdings rebounds on balance-sheet progress reported in media coverage.
• Power constraints and grid interconnect delays remain a headwind in top markets like Northern Virginia, prompting selective market reactions to greenfield announcements, per CBRE and utility filings cited by Bloomberg.

Market Snapshot And Movers Equity markets are rewarding rate-sensitive data center landlords as cooling U.S. inflation and December Federal Reserve signals on future cuts support REIT valuations; shares of Equinix and Digital Realty are higher by an estimated 3–6% over the past week, while broader REIT benchmarks also advanced, Reuters reported following recent Fed communications in December 2025. Investors are also digesting stronger leasing pipelines tied to AI workloads that continue to lift near-term sentiment for interconnection and hyperscale assets, according to CBRE’s late-2025 market updates. The rally extends to data center-adjacent operators. Iron Mountain trades firmer on expectations for sustained multi-megawatt signings and record colocation demand reported in recent quarters, while American Tower gains as investors re-rate the value of its CoreSite data center business tied to cloud and enterprise interconnect growth, per sector coverage compiled by Bloomberg. China-focused GDS Holdings has also spiked intermittently in recent sessions amid ongoing portfolio optimization and deleveraging moves highlighted in recent media reports, drawing speculative flows to the ADRs, according to Reuters. Analyst Notes And 2026 AI Spending Context Sell-side desks cite rising 2026 hyperscale capex tied to AI accelerator deployments as a support for wholesale and interconnection landlords. Industry sources suggest cloud and AI infrastructure spending will expand at a mid-teens pace in 2026 off a high 2025 base, aided by next-generation GPU rollouts and expanded training capacity, according to recent commentary from Dell’Oro Group and IDC. The anticipated uptick underpins positive estimate revisions for operators with power-secured land banks and JV access to hyperscale capital, as noted in late-2025 institutional research recapped by Bloomberg. Digital campus developers with secured power and zoning remain better positioned as utility interconnects tighten in NoVA, Phoenix, and parts of Texas. Recent CBRE analysis points to record pre-leasing and constrained vacancy into 2026, particularly for 100MW-plus campuses, bolstering near-term pricing power for Equinix and Digital Realty, while supporting steady cross-connect revenue growth for American Tower’s CoreSite unit, per CBRE Data Center Insights. Macro Drivers And Rate Sensitivity The December policy backdrop is a key tailwind. U.S. equities rallied after the Federal Reserve signaled a path toward easing in 2026, a shift that typically lowers discount rates used in REIT valuation models and supports price-to-FFO multiples, Reuters reported in mid-December 2025. Against that backdrop, data center-focused landlords outperformed broader real estate peers over several recent sessions, aided by strong leasing activity and AI-related demand, according to sector recaps from Bloomberg. Still, grid capacity constraints and longer lead times for substation delivery continue to moderate investor enthusiasm for greenfield announcements without committed power. CBRE’s late-2025 trends update highlighted multi-quarter delays in key corridors, with developers increasingly relying on joint ventures and forward power procurement to maintain build schedules, a factor investors are watching closely in 2026 allocations to names like Digital Realty and Iron Mountain (CBRE). For more on related Data Centers developments. Key Stock Moves And Catalysts While intraday volatility remains elevated, the market reaction has been notably favorable when operators disclose incremental power wins, campus pre-leasing, or de-risking financings. Equinix’s continued xScale leasing visibility, Digital Realty’s asset recycling progress, and Iron Mountain’s reported record signings in recent quarters have become recurring catalysts in sector trading, per roundups from Reuters and Bloomberg. In Asia, GDS has seen outsized moves on portfolio updates and liquidity milestones covered by Reuters, which investors view as signals of improving balance-sheet flexibility. Looking into early 2026, investors are monitoring hyperscaler disclosures and supply chain signals, including AI server and power equipment lead times, which feed directly into landlord leasing pace and development margins. IDC’s late-2025 commentary on server and accelerator demand implies robust AI infrastructure builds carrying through 2026, supporting steady absorption rates and underpinning REIT cash flow trajectories, according to IDC. This builds on broader Data Centers trends tracked across North America, Europe, and APAC. Company Performance And Recent Drivers

Company	Recent Move (last 5–10 sessions)	Primary Driver	Source
Equinix (EQIX)	Up ~3–5%	Rate sensitivity plus AI interconnection demand	Reuters market wrap
Digital Realty (DLR)	Up ~4–6%	Leasing visibility and asset recycling progress	Bloomberg sector recap
Iron Mountain (IRM)	Up ~2–4%	Record multi-MW signings trajectory	CBRE Data Center Insights
American Tower (AMT)	Up ~1–3%	CoreSite interconnection growth	Bloomberg markets
GDS Holdings (GDS)	Up ~8–12%	Restructuring and liquidity actions	Reuters Asia

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Outlook And What To Watch The next near-term catalyst is hyperscaler spending commentary and any updates on power procurement or substation timelines in Northern Virginia, Phoenix, and Dublin. CBRE and industry trackers continue to flag constrained power as the gating factor for new capacity, suggesting pricing remains supported into 2026 even as supply chains normalize, according to CBRE. IDC’s late-2025 view on accelerated server deployments reinforces steady absorption through mid-2026, bolstering cash flow visibility for scaled landlords, per IDC. On the macro side, continued signs of easing inflation and policy follow-through would further support REIT multiples, while any re-acceleration in yields could cap upside. Investors are also monitoring campus-level announcements for secured megawatts and interconnect density gains, especially at Equinix, Digital Realty, and Iron Mountain, as these updates have driven outsized single-day moves in recent sessions, according to Reuters coverage. FAQs { "question": "Why are data center REIT stocks rising this week?", "answer": "Investors are rotating into rate-sensitive real estate after December Federal Reserve signals pointed to easing in 2026, which generally lowers discount rates used in REIT valuation models. At the same time, demand from AI training and inference is driving stronger multi-megawatt leasing and interconnection growth. Names like Equinix, Digital Realty, Iron Mountain, and American Tower have benefited as analysts highlight improving 2026 cash flow visibility. Reuters and Bloomberg market wraps this week attribute gains to both macro rate expectations and AI-driven leasing momentum." } { "question": "How does AI infrastructure spending impact Equinix and Digital Realty?", "answer": "Higher AI infrastructure spending boosts wholesale and campus pre-leasing, particularly where operators control power-secured land. Equinix sees tailwinds through xScale and interconnection density, while Digital Realty benefits from build-to-suit campuses and asset recycling that funds expansion. Industry firms like IDC and Dell’Oro expect hyperscale capex to grow at a mid-teens pace in 2026, sustaining absorption and supporting rent uplifts. These dynamics have triggered positive estimate revisions and contributed to recent stock outperformance in both names." } { "question": "What risks could stall the data center stock rally?", "answer": "Power constraints and grid interconnect delays in markets such as Northern Virginia, Phoenix, and parts of Texas remain the primary risks, potentially pushing out delivery timelines. A reversal in bond yields or tighter financial conditions could also compress REIT multiples. Regulatory permitting or community opposition can slow site development. Finally, supply chain setbacks for power equipment or AI servers could defer customer readiness, affecting near-term leasing conversion. CBRE’s late-2025 updates emphasize the power bottleneck as the gating factor." } { "question": "Why is GDS Holdings showing bigger percentage moves than U.S. peers?", "answer": "GDS Holdings is more sensitive to balance-sheet developments and restructuring signals, which can drive larger day-to-day swings. Recent media coverage citing portfolio optimization and liquidity milestones attracted speculative inflows, resulting in outsized gains relative to U.S. REIT peers. As an ADR focused on China and APAC data centers, GDS also reacts to regional macro news and currency factors. Reuters’ Asia market reports this month highlight how incremental financing updates have catalyzed sharp short-term rallies in the stock." } { "question": "What should investors watch next for this sector?", "answer": "Key watch items include hyperscaler capex disclosures, secured megawatt announcements, and updates on substation energization timelines in core markets. Investors should track interconnection growth at Equinix and CoreSite, large-campus pre-leasing at Digital Realty and Iron Mountain, and any power procurement wins that de-risk 2026 deliveries. Macro catalysts include upcoming inflation prints and policy commentary that influence REIT multiples. IDC and CBRE reports due in early 2026 will also shape expectations for absorption and pricing power across regions." } References

• U.S. stocks advance as investors price in future Fed easing - Reuters, December 2025
• AI buildout supports data center landlords - Bloomberg, January 2026
• Global Data Center Market Insights - CBRE, December 2025
• Data Center Capex Commentary - Dell’Oro Group, December 2025
• IDC Worldwide Enterprise Infrastructure Update - IDC, December 2025
• Equinix Company Information - Equinix, Accessed January 2026
• Digital Realty Company Information - Digital Realty, Accessed January 2026
• American Tower Company Information - American Tower, Accessed January 2026
• Iron Mountain Company Information - Iron Mountain, Accessed January 2026
• Asia Markets Coverage Including GDS Holdings - Reuters, January 2026