Mizuho sees upside for data center REITs amid state pushback
Mizuho maintains Outperform ratings on Equinix (EQIX) with a $1,275 price target and Digital Realty (DLR) with a $223 price target, citing potential gains of 22% and 20% respectively. The firm notes growing state and community opposition to data center construction due to concerns over electricity, water use, and environmental impacts. Mizuho believes under-construction projects are less at risk, but land banks may face some uncertainty.
How this was made
The 30-second read
Why it matters
Analyst upgrades suggest a near‑term bullish bias for EQIX and DLR despite regulatory headwinds.
Market read
Analyst upgrades could drive buying interest in data‑center REITs amid regulatory uncertainty.
What to watch
Potential for policy reversals or incentives in other states may offset restrictive trends.
Background
Mizuho's research note assesses the impact of state-level opposition to data‑center construction on REIT valuations.
Ticker impact
Mizuho maintains Outperform rating on Equinix with a $1,275 price target, implying a 22% upside.
Potential price appreciation of ~20% if target is reached.
Outperform rating and sizable price target increase provide a clear bullish signal.
Mizuho maintains Outperform rating on Digital Realty with a $223 price target, implying a 20% upside.
Potential price appreciation of ~20% if target is reached.
Outperform rating and sizable price target increase provide a clear bullish signal.
Market effects
State-level data‑center moratoriums could pressure REITs focused on data‑center assets.
U.S. states with restrictive policies may limit new supply, supporting existing REIT valuations.
Highlights regulatory risk for global data‑center providers and related infrastructure stocks.
Counterpoint
If moratoriums stall new projects, demand for existing capacity could weaken, limiting upside.
Key entities
- Research FirmMizuho
Provides the Outperform ratings and price targets.
- CompanyEquinix
Data‑center REIT receiving a $1,275 price target.
- CompanyDigital Realty
Data‑center REIT receiving a $223 price target.
