Why Equinix Is a Strategic Buy for 2026: A Deep Dive into Recurring Revenue, AI Demand, and Global Expansion

The global digital infrastructure landscape is undergoing a seismic shift, driven by the exponential growth of artificial intelligence (AI) and the relentless demand for cloud connectivity. At the forefront of this transformation is Equinix, a leader in colocation and interconnection services. As 2026 approaches, the company's strategic positioning-rooted in robust recurring revenue growth, AI-driven demand, and aggressive expansion in key markets-makes it an increasingly compelling investment.

Recurring Revenue: A Foundation of Resilience

Equinix's financial performance in Q3 2025 underscores its ability to generate stable, long-term cash flows. Monthly recurring revenue (MRR) grew by 8% year-over-year, both on an as-reported and normalized basis, reflecting sustained demand for its infrastructure and interconnection services. Recurring revenues for the quarter totaled $2.22 billion, a 7.6% increase from the prior-year period. This resilience is further evidenced by the company's adjusted EBITDA margin of 50% and a 9% year-over-year rise in AFFO per share according to data, metrics that highlight its operational efficiency and pricing power.

The strength of Equinix's recurring revenue model is amplified by its interconnection business, which now accounts for 19% of total recurring revenue according to financial reports. In Q3 2025 alone, the company added 7,100 net interconnections, driven by customer demand for secure, low-latency connectivity to cloud providers and AI platforms. This trend is not cyclical but structural, as enterprises increasingly rely on distributed architectures to manage data-intensive workloads.

AI-Driven Demand: A Catalyst for Growth

The rise of AI is reshaping the data center industry, and Equinix is uniquely positioned to capitalize on this shift. The company recently launched its Distributed AI™ framework, which enables customers to optimize AI workloads-such as training in compute-abundant regions and inference near data sources-while ensuring private connectivity with ecosystem partners. This framework is supported by Fabric Intelligence, an AI-driven control plane that automates scaling for multicloud AI initiatives.

Equinix's AI-ready infrastructure is already attracting significant investment. In September 2025, the company entered its 77th global metro in Chennai, India, with a new facility designed to scale to 4,250 cabinets and equipped with liquid cooling to handle high heat densities according to industry reports. This expansion extends its Mumbai ecosystem to southern India, a region experiencing rapid AI adoption. Similarly, joint ventures in Paris and Singapore have added critical capacity to support AI workloads in Europe and Asia.

To sustain this momentum, Equinix is collaborating with alternative energy providers like Oklo and Bloom Energy to develop next-generation nuclear and fuel cell technologies according to company announcements. These partnerships address the energy-intensive nature of AI infrastructure, ensuring long-term sustainability and reliability-a critical factor for investors wary of energy constraints.

Expansion Momentum: Strategic Global Footprint

Equinix's expansion strategy for 2026 is both ambitious and geographically diverse. The company plans to open or expand 20 projects globally, including new data centers in São Paulo, Istanbul, and Hong Kong according to strategic plans. These markets are strategically chosen to serve growing AI and cloud ecosystems in Latin America, the Middle East, and Asia-Pacific.

The company's global interconnection portfolio has already surpassed 482,000 interconnections, with 6,000 added in Q4 2024 alone according to financial data. This scale provides a flywheel effect: as more customers connect to Equinix's platform, the network becomes increasingly valuable, driving further adoption. Moreover, Equinix's goal to double its data center capacity by 2029 signals a long-term commitment to outpacing demand, a rarity in an industry often constrained by physical and regulatory bottlenecks.

Addressing Risks and Revisions

While Equinix's full-year 2025 revenue guidance was slightly reduced to $9.21–$9.33 billion due to lease delays and foreign exchange impacts, this adjustment does not detract from its core strengths. The company's Q3 results-$2.32 billion in revenue, a 5% year-over-year increase-demonstrate its ability to adapt to macroeconomic headwinds according to financial analysis. Furthermore, the upward revision of AFFO per share guidance (8–11% growth) underscores its focus on profitability, a key metric for long-term shareholder value.

Conclusion: A Strategic Buy for 2026

Equinix's combination of recurring revenue resilience, AI-driven demand, and strategic expansion positions it as a must-own asset for investors seeking exposure to the digital infrastructure boom. The company's ability to monetize the shift toward distributed computing and AI, while addressing energy and sustainability challenges, ensures its relevance in a rapidly evolving market. As enterprises worldwide accelerate their digital transformations, Equinix's global footprint and innovative offerings will likely drive consistent growth, making it a strategic buy for 2026.