J.P. Morgan Communications Infrastructure REITweek 2026: EQIX and DLR Management Meeting Takeaways
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During the 2026 REITweek, J.P. Morgan met with the management teams of Equinix (EQIX) and Digital Realty (DLR) to update key business trends. EQIX highlighted that its xScale joint venture will drive growth in 2026 and beyond, while DLR focused on leasing momentum and balance sheet optimization. Both companies remain optimistic about AI-driven data center demand, although they face ongoing challenges related to power supply and costs.
J.P. Morgan maintains an Overweight rating on EQIX with a target price of $850. The bank notes EQIX's xScale joint venture is expected to contribute approximately $0.50 per share to AFFO in 2026. EQIX anticipates 2026 capital expenditures of $2.5 to $3 billion, with around 60% allocated to the xScale project. Furthermore, EQIX's interconnection revenue grew 8% year-over-year in the first quarter of 2026 to $420 million. The firm expects EQIX's 2026 adjusted EBITDA to grow between 10% and 12%.
J.P. Morgan maintains a Neutral rating on DLR with a target price of $150. DLR raised its 2026 leasing target from 500MW to 600MW, primarily propelled by AI customer demand. DLR's leasing backlog increased from 400MW at the end of 2025 to 450MW in the first quarter of 2026. DLR projects 2026 AFFO between $6.20 and $6.40 per share. Both companies observed that power densities for AI workloads have surged from 5kW per rack to 15-20kW per rack. Key risks include power supply delays, customer concentration, and rising interest rates.