• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Stock

Mizuho sees strong FY25 for data centers; Digital Realty, Equinix get PT boost

by December 11, 2024
written by December 11, 2024

Investing.com– Mizuho (NYSE:MFG) Securities remains optimistic about the data center sector heading into fiscal 2025, raising price targets for Digital Realty Trust Inc (NYSE:DLR) and Equinix Inc (NASDAQ:EQIX) due to strong demand from cloud and AI investments.

However, Mizuho maintains a neutral stance on tower REITs like American Tower Corp (NYSE:AMT), citing lingering uncertainties in carrier capital expenditure and the pace of the 5G rollout. Tower REITs own and operate cell towers or communication towers.

Cloud and AI-related capex are expected to fuel robust data center demand in FY25, Mizuho analysts said in a note.

Cloud spending is projected to grow nearly 20% annually through 2027, reaching $1.34 trillion from $795 billion as of date, while AI capex from major hyperscalers could hit $310 billion by 2026. These trends support solid bookings and pricing power for data center operators, according to Mizuho.

Mizuho raised its price target for Digital Realty Trust to $211 from $170, emphasizing its ability to sustain pricing power through rent spreads, projected at 10% annually over the next two years.

Record bookings of $505 million in Q3 2024, well above the $195 million 1H24 average, highlight strong demand, analysts said. The brokerage expects DLR’s funds from operations (FFO) growth to reach high single digits by FY26, bolstered by lucrative development yields.

For Equinix , Mizuho increased its price target to $1,094 from $971. Despite investor concerns over delayed AI capital deployment, analysts see multiple growth levers.

EQIX’s enterprise colocation business is expected to achieve high single-digit monthly recurring revenue growth in FY25, with EBITDA margins approaching 49% by FY26, according to Mizuho.

Mizuho remains cautious on towers, keeping American Tower at “Neutral” with no changes to its price target. Although carrier activity saw a slight increase in late 2024, tower job postings remain at decade lows, signaling muted growth in 2025-26, analysts said.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Japan stocks higher at close of trade; Nikkei 225 up 0.07%
next post
Lucky Strike maker BAT sees stronger H2 revenue growth in new category, combustibles

You may also like

BASF results down on impairments, restructuring

January 27, 2025

European chipmakers slump as traders gauge DeepSeek AI...

January 27, 2025

Nasdaq futures tumble as China’s AI push rattles...

January 27, 2025

China Vanke’s CEO, chairman resign amid growing liquidity...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

Italy’s MPS shares fall ahead of Mediobanca board...

January 27, 2025

British Land stock drops following stake sale

January 27, 2025

UMG shares rally after new multi-year pact with...

January 27, 2025

BASF shares indicated 3% lower as impairments drag...

January 27, 2025

Ryanair cuts 2026 traffic forecast amid ongoing Boeing...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks

      June 26, 2025
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

      June 26, 2025
    • Bumble shares jump 26% as dating company plans to axe 30% of workforce

      June 26, 2025
    • Small-business AI use is lagging, but one firm is channeling Sherlock Holmes and knocking out ‘grunt work’

      June 25, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (534)
    • Stock (6,426)

    Latest News

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

    Popular News

    • US sides with Argentina in dispute over $16 billion YPF judgment
    • Bright Horizons stock gains 3% on strong Q3 results, upbeat guidance

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy