Digital infrastructure company Equinix, Inc. (EQIX) recently announced the delivery of the first-ever high-capacity subsea cable system in collaboration with EllaLink, the optical submarine cable linking the European and South American continents.
Following the news, shares of the company rose 2.3% to close at $797.59 on Wednesday.
Implications of the Collaboration
With a key focus on reducing latency, this new collaboration with EllaLink will allow Equinix to provide a 50% increase in network performance between data centers in Brazil, Portugal and Spain when compared to routes that had to previously transit through North America.
The new system will be provided by EllaLink to Equinix’s International Business Exchange (IBX) data centers, namely the SP4 in São Paulo, LS1 in Lisbon and MD2 in Madrid.
Management Commentary
The Vice-President of Business Development at Equinix, Jim Poole, said, “More data is being produced and processed today than ever before—and almost every byte of data that moves over the internet touches a subsea cable. As a result, organizations require access to high-capacity, low-latency networks capable of connecting them to data centers across oceans with the highest levels of reliability. This is where Equinix plays a critical role and offers a huge advantage to customers. Any user of a subsea cable network that lands inside one of our global data center termination points has instant, low-latency access to a host of industry ecosystems inside Equinix.”
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Price Target
Recently, BMO Capital analyst Ari Klein assigned a Buy rating on the stock with a price target of $875, which implies upside potential of 9.7% from current levels.
The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 8 Buys, 4 Holds and 1 Sell. The average Equinix price target of $884.08 implies that the stock has upside potential of 10.8% from current levels.
Smart Score
Equinix scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform market expectations. Shares have gained 15% over the past year.
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