Commentary

Key developments

Overall, most listed Digital Infrastructure stocks in the region are up over the last year, but with wide spreads in performance among the group. Growth in cloud and AI is improving sentiment towards DC stocks, but economic growth is expected to be sluggish relative to previous years, creating uncertain performance for other Digital Infrastructure equities.

Global Data Centre

Global Data Centre’s stock jumped nearly 39% in the last month, after the company announced on May 20th that the company was divesting of its co-controlled investment in Etix, the European edge data centre platform, to Infranity Equity Fund. After transaction fees, the net proceeds from the divestment are forecast to be $175 million, a 52% premium to the carrying value for the investment as of December 2023.

Uniti Group (US)

Uniti Group’s stock fell close to 29% over the last month after investors reacted negatively to the company’s announcement that it will merge with Windstream Holdings. Kenny Gunderman, CEO of Uniti said that “the merger combines Uniti’s national wholesale owned fiber network with Windstream’s fiber-to-the-home (“FTTH”) business to create a premier insurgent fiber provider in the U.S. We believe the combined company, with its scaled facilities-based infrastructure platform, will be uniquely positioned within Tier II and III markets throughout the U.S.”

Equinix

Equinix’s stock rose close to 10% over the last month, with the company releasing strong first quarter 2024 results with quarterly revenues increasing 6% over the same quarter last year to $2.1 billion. The company recorded $992 million of adjusted EBITDA, an 8% increase over the previous quarter, and an adjusted EBITDA margin of 47%.

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