Elliott Investment Management Takes Advantage of Equinix's Data Center Know-How to Amplify Returns

Elliott Investment Management has taken a position in Equinix, a real estate investment trust and operator of 270 data centers globally. The company provides carrier-neutral collocation and interconnection services to networks, cloud providers, and enterprises. Elliott, a successful activist investor, may use its data center know-how to amplify returns at Equinix by improving operations and reducing costs. The firm has a history of strategic activism in the technology sector and has been successful with this strategy.

Elliott Investment Management (EIM), a prominent activist investor, has taken a significant position in Equinix Inc. (EQIX), a leading global data center operator. Equinix, with a market capitalization of $75.53 billion, provides carrier-neutral collocation and interconnection services to networks, cloud providers, and enterprises. The company operates 270 data centers in 75 metro areas around the globe.

EIM, known for its strategic activism in the technology sector, has a history of successfully improving operational efficiency and reducing costs at companies like Switch and Ark Data Centers. The firm's expertise in data centers, combined with its track record, positions it well to influence Equinix's future performance.

Equinix's recent Analyst Day revealed higher-than-expected capital expenditures (capex) of $3.3 billion for 2025 and $4 billion to $5 billion annually from 2026 to 2029, along with a downgraded forecast for adjusted funds from operations (AFFO) to 5% to 9%. These announcements led to a 17.75% drop in Equinix's share price between June 24 and June 26, 2024. However, experienced investors like EIM saw this as an opportunity to amplify returns.

EIM's experience as an investor, director, and owner/operator of data centers could help Equinix in several ways. Firstly, EIM could assist in better communicating Equinix's plans to the market, particularly regarding its capex strategy and long-term growth forecasts. Equinix's unique opportunity lies in AI inferencing, where it can play a central role as the largest third-party data center provider with deeply interconnected data centers in key end-user markets.

Secondly, EIM could help optimize Equinix's cost structure and lower interest expenses. Management has already targeted margin growth of 300 basis points from 49% to 52% by 2029, but EIM's expertise could push this further. Additionally, financial engineering could decrease Equinix's interest rate paid and improve its AFFO per-share growth.

Historically, Equinix has commanded a premium multiple, but since its Analyst Day, it has underperformed its closest peer, Digital Reality Trust (DRL), by approximately 11 percentage points. EIM's involvement could help Equinix regain its premium valuation and improve shareholder returns.

Given EIM's industry experience and similar perspective to management, an invitation to join the board before the next annual meeting in May 2026 is not unlikely. This move would allow EIM to actively participate in Equinix's strategic decisions and help execute its plan.

References:
[1] https://www.cnbc.com/2025/08/02/how-activist-elliott-may-use-its-data-center-know-how-to-lift-returns-at-equinix.html
[2] https://www.goldenbeltcoop.com/news/story/33674404/billionaire-paul-singer-is-doubling-down-on-this-data-center-stock-should-you