(Reuters) – Equinix forecast third-quarter revenue below market estimates on Wednesday, a sign that demand for data centers was slowing as businesses curtail spending in an uncertain economy.
Shares of the company fell more than 2% in extended trading, having risen by nearly a fourth so far this year.
Equinix said it expects revenue of between $2.04 billion and $2.07 billion in the current quarter, compared with analysts’ estimates of $2.08 billion, according to Refinitiv data.
The results contrast with upbeat earnings at rival Digital Realty and suggest that an expected demand boost from this year’s rise of generative artificial intelligence could take longer to materialize. Data centers are crucial in supporting AI as the tech requires massive computing power.
In the three months ended June 30, Equinix’s revenue jumped 11% to $2.02 billion, in line with Wall Street expectations.
Second-quarter adjusted core earnings rose 5% to $901 million, and Equinix said it expected a figure of between $908 million and $938 million for the current quarter, compared with expectations of $920.4 million.
Adjusted funds from operations – a key measure of cash flow – came in at $8.04 per share, 6% higher than a year earlier.
(Reporting by Aditya Soni; Editing by Maju Samuel)