'Built For This Moment': Data Center REITs Equinix, Digital Realty See AI Boom Hitting Inflection Point

Equinix and Digital Realty have largely been on the sidelines of the artificial intelligence data center gold rush. But after years of preaching patience, the world’s largest data center landlords may finally be seeing the market swing back their way. 

Despite operating more than 600 data centers between them, REITs Equinix and Digital Realty have been somewhat peripheral players in the AI-driven data center boom. As Big Tech’s AI arms race has driven trillions of dollars in data center spending and pushed the sector from obscurity into a critical pillar supporting the U.S. economy, the bulk of that spending has flowed to a segment of the market where Digital Realty and Equinix have relatively little exposure or experience. 

The AI surge has centered on massive campuses, often far from established markets, as hyperscalers chase the gigawatts of power needed to train AI models — not the smaller, more connectivity-focused facilities near population hubs that anchor the REITs’ portfolios. 

As a result, the data center sector’s two most established stalwarts have seen growth over the past three years that, while solid, hasn't come close to reflecting the exponential expansion of the sector at large. Similarly, their share prices haven't benefited from the AI boost driving record valuations for tech giants like Amazon, Google and Microsoft. 

Yet Equinix and Digital Realty have leaned into their core business models. Leaders at both firms urged investors to take the long view, insisting the demand landscape would inevitably take a dramatic turn in their direction.

At the heart of this strategy is the idea that as corporations and consumers increasingly put AI to use, the need for computing capacity shifts away from AI training and toward inference. Inference workloads typically need to be located close to large population centers where the users are and in facilities where data can be transferred easily between different cloud providers and networks.

Equinix and Digital Realty have long argued their distinct data center portfolios are positioned to dominate the inference marketplace. 

Now, both firms say this inflection point has finally arrived.

The firms’ share prices have soared this year amid surging inference demand and a growing Wall Street conviction that they are uniquely equipped to expand in major data center hubs amid growing land scarcity and increasingly acute power constraints. 

“We were built for this moment,” Equinix CEO Adaire Fox-Martin told analysts Wednesday. “It is what we do best. It is where we have continued to focus, and our focus is paying off.”

Earnings reports from Equinix and Digital Realty over the last two weeks set off a wave of enthusiasm for the REITs on Wall Street. Equinix’s share price shot up nearly 14% following its Wednesday filing, the stock’s largest single-day jump since 2012. Shares of Digital Realty have spiked more than 10% since the firm’s Feb. 5 earnings release. 

Equinix’s fourth-quarter bookings jumped 42% year-over-year, while its 7% revenue growth exceeded investor expectations. Digital Realty reported record results for 2025, with earnings jumping 10% from the year prior. 

But the market’s sudden exuberance for the firms stems from more than just their quarterly numbers. It reflects growing recognition that the thesis at the core of the firms’ strategies is playing out: a shift toward inference that is pushing Digital Realty and Equinix into more central roles in the AI infrastructure boom.

In the fourth quarter, 60% of Equinix’s largest deals were driven by AI workloads, a 10% jump from earlier in the year. Equinix executives said this marks an acceleration of AI inference demand growth. Half of those AI workloads weren't from cloud providers or other hyperscalers but from enterprise customers in industries like retail, e-commerce, manufacturing and financial services — a far higher share than in previous quarters.

“We deliver what AI inference demands: network diversity, cloud proximity, AI-ready interconnection and low latency. These are structural advantages we have built over decades, and we believe they will continue to set us apart,” Fox-Martin said Wednesday. “This is a long-term tailwind for our business, particularly as AI inferencing expands across industries.”

While Digital Realty’s business is weighted far more toward major tech firms than Equinix, Digital Realty leadership was also eager to show investors that AI inference is now driving a rapidly growing share of demand to its portfolio.

CEO Andy Power said cloud providers need to locate large blocks of AI computing near major metro areas to offer zones with low-latency inference as a service for their customers, and that need is growing.

“For the hyperscalers, the desire for capacity blocks in the cloud zone markets is certainly becoming more and more of a priority,” he told analysts. 

Although many new data center developers have emerged in recent years, the leadership teams at Digital Realty and Equinix touted what they said is their unique ability to develop new capacity in the deeply land- and power-constrained markets where inference demand is surging. 

While developers have increasingly expanded into nontraditional markets in pursuit of power, the two REITs have focused on squeezing new capacity into major metro areas where that power is scarce.

Equinix has 52 development projects underway, almost all of them in major markets like Chicago, Dallas, New York, Seattle and D.C. Digital Realty has 769 megawatts under construction in major metro areas. 

Both firms said their long track records of delivering capacity in primary markets  means they have the expertise and relationships with officials, utilities and contractors to execute projects in locations where others would run into trouble with entitlements or power acquisition. 

The two companies have also deployed capital toward banking land and power in the most constrained data center hubs. Digital Realty has 5 gigawatts of powered land under its control in the most power-constrained markets, while Equinix has banked 3 GW of powered land. 

This kind of upfront capital deployment prior to securing a tenant is something few developers are able to do, and it gives the REITs the ability to deliver capacity quickly and on predictable timelines in markets like Northern Virginia, Power said.

“Customers are prioritizing operators with verified visibility into the future supply of power and a track record of on-time or even accelerated delivery,” Power said.  “We're probably one of the few in the industry taking a little bit more risk in the development and getting pad-ready land … before we have a customer in hand. Most of the private capital folks are waiting for that lease to get signed because that lease secures the financing.”

Investors and executives at both REITs have highlighted their established data center ecosystems in key markets as an advantage over new players entering the space. Inference-driven demand places a high value on strong interconnection to cloud providers, multiple fiber networks and other customers. Few other companies are able to offer this kind of inventory in nearly every major global market. 

Investors have also highlighted the incumbent advantage the data center REITs have over new players in the space. Following Equinix's earnings call, Reflexivity CEO Jan Szilagyi said the firm is poised to be “the dominant player” in the next wave of AI demand.

“There is what I’d call network effect here, because the more businesses and ISPs and so forth connect into their center, the more attractive it becomes for others to locate there as well,” Szilagyi said Thursday on CNBC. “Being the largest player there gives you a potentially extraordinary advantage versus everybody else who might be doing one or two of these.”