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Equinix's (EQIX) Tokyo IBX Data Center to Get Quantum Computers

Amid the growing reliance on technology and acceleration in digital transformation strategies by enterprises, Equinix, Inc. EQIX recently announced that Oxford Quantum Circuits (“OQC”) aims to make one of the most powerful quantum computers commercially available to businesses worldwide through Equinix's TY11 Tokyo International Business Exchange (IBX) data center. OQC is a leading global Quantum Computing as a Service (QCaaS) company.

The move is expected to benefit businesses with the ease of access to quantum computing, making Equinix’s latest move a strategic fit. 

Leveraging on Equinix's on-demand interconnection solution, Equinix Fabric, OQC is installing its quantum hardware in the company’s TY11 to make QCaaS available to businesses and organizations worldwide on the former’s global platform by late 2023.

Once QCaaS is connected to Equinix Fabric, this will provide businesses with means to trial and experiment with the ground-breaking technology by directly connecting to QCaaS within their own digital infrastructure with greater security and ease.

With a likelihood that demand from organizations will escalate in the upcoming period, the technology is expected to support a wide range of sectors, from drug discovery and development to risk management, banking and advanced manufacturing.

Per Arun Dev, global head of digital interconnection at Equinix, “Quantum computing has the potential to transform the way businesses solve problems both now and into the future, especially as our customers look for more innovative solutions.”

Data center REITs like Equinix are expected to benefit from growth in artificial intelligence, as well as autonomous vehicle and virtual/augmented reality markets, which is anticipated to be robust over the next five-six years.

Given this backdrop, the company has been making concerted efforts to tap such growth opportunities through acquisitions and development efforts and has been very active on this front.

In 2022, the company opened or acquired 13 new IBX data centers, opened three new xScale data centers through its joint ventures and entered three new markets. This increased Equinix’s total number of IBX and xScale data center facilities to 248.

As of the fourth-quarter end, Equinix had 49 major builds in progress across 35 metros in 23 countries, including nine xScale builds. This represents the largest new-build pipeline in company’s history.

With a solid balance-sheet position and ample financial flexibility, Equinix remains well-positioned to capitalize on long-term growth opportunities.

EQIX currently carries a Zacks Rank #3 (Hold). Its shares have gained 5.5% in the quarter-to-date-period against the real estate market’s fall of 0.3%.

Zacks Investment Research
Zacks Investment Research


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Stocks to Consider

Some better-ranked stocks from the REIT sector are Alexandria Real Estate Equities ARE, Terreno Realty TRNO and Whitestone REIT WSR, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Alexandria Real Estate’s 2023 funds from operations (FFO) per share stands at $8.95.

The Zacks Consensus Estimate for Terreno Realty’s current-year FFO per share is pegged at $2.17.

The Zacks Consensus Estimate for Whitestone REIT’s 2023 FFO per share is pegged at $86 cents.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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