Equinix Expands In US, Opens 13th IBX In Silicon Valley

Global data center service provider, Equinix Inc. (NASDAQ:EQIX) , announced that it has opened the 13th International Business Exchange (IBX) data center — SV10 — in the Silicon Valley. The new center will enable the company to meet the growing demand for data center services in this region.

Notably, the 13th data center is located at Equinix’s Great Oaks campus in San Jose. In the first phase, the company invested $122 million and added 930 cabinets, covering an area of 37,000 plus square feet. It has planned for two additional phases, upon completion of which, the facility’s capacity will increase to accommodating 2,820 cabinets.

The above-mentioned facility will help Equinix address the rising demand for cloud services in the region. The increase in demand is also evident from its recently released market study report on Global Interconnection Index.

Per the report, the United States is the world’s largest and most advanced region for Interconnection Bandwidth growth. It is anticipated that 82% of the organization’s bandwidth will be “dedicated to interconnection to networks and cloud by 2020.” The report further states that the Silicon Valley is among the top four regions within the United States which are witnessing the fastest Interconnection Bandwidth growth. Moreover, the region is projected to witness 39% growth through 2020.

Therefore, we believe that expanding its facility in the Silicon Valley will attract more enterprises to opt for Equinix’s data center services, in turn, boosting the company’s revenues.

Shares of Equinix have been steadily trading higher on a year-to-date basis. The stock generated a return of approximately 27.3%, while the industry, to which it belongs to, has incurred a loss of 3.6% during the same time frame.

Over the years, Equinix has invested approximately $400 million in the Silicon Valley. The company’s data centers across the region serve more than 625 customers who have options to chose from more than 125 network service providers and cloud service providers, including biggies like Amazon’s (NASDAQ:AMZN) AWS, Microsoft’s (NASDAQ:MSFT) Azure, Alphabet’s (NASDAQ:GOOGL) Google Cloud Platform and Oracle’s (ORCL) Oracle (NYSE:ORCL) Cloud.

The recent expansion plan is in sync with Equinix’s $1-billion investment plan announced in April 2017. According to the plan, the company is slated to open five IBX data centers this year, one each at Sao Paulo, Frankfurt, Amsterdam, Silicon Valley and Washington D.C. Apart from this, it also intends to make expansion at 14 of its existing data centers.

Equinix remains positive on the growing demand for data centers. To meet the rising demand for cloud services, this global interconnection and data center company is expanding its IBX data centers globally, and gaining popularity among tech companies looking for data management.

Currently, Equinix carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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