Equinix forecast first-quarter and annual revenue below estimates on Wednesday, hurt by a strong dollar amid rising concerns about hefty spending on data centre expansion as businesses double down on generative AI adoption.
Shares of the company fell more than 2 per cent in extended trading.
Massive spending on AI and infrastructure investments has come under scrutiny this year after the launch of China's DeepSeek, which claimed to have developed AI models at a fraction of the cost compared to US tech leaders OpenAI and Alphabet's Google.
Equinix expects first-quarter revenue to be between US$2.19 billion and US$2.23 billion, below analysts' average estimate of US$2.29 billion, according to data compiled by LSEG.
The forecast includes US$25 million of higher seasonal costs and a US$20 million negative foreign currency impact, when compared to the average exchange rates in the fourth quarter of 2024, the company said.
The company expects 2025 revenue to be between US$9.03 billion and US$9.13 billion, including a US$252 million negative foreign currency impact when compared to the prior rates. Analysts estimated US$9.40 billion.
Equinix has a significant presence in Asia and Europe, making it susceptible to changes in foreign exchange rates.
A strong dollar could hurt fourth-quarter revenue by as much as US$31.5 million, TD Cowen analysts said in a note earlier in February.
In the three months ended December 31, Equinix's revenue stood at US$2.26 billion.
Analysts expected US$2.97 billion.
Adjusted funds from operations, a key measure of cash flow, came in at US$7.92 per share in the fourth quarter, missing estimates of US$7.95 per share.
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