SGA re-enters Equinix as AI inferencing drives data centre demand

Sustainable Growth Advisers (SGA) has re-entered its position in Equinix, marking a strategic shift for the investment management firm as it navigates the evolving landscape of artificial intelligence infrastructure. The Global Growth Strategy portfolio initiated a position in the digital infrastructure company during the second quarter of 2026, reversing a decision made in 2024 when SGA sold its stake after holding it for a decade.

The rationale for the new investment is anchored in re-accelerating growth driven by the ramp-up of AI inferencing and sustained high power demand. SGA noted that the two primary factors that led to the previous exit—slowing growth rates and a leadership transition—have since reversed. With new management now in place, the firm views Equinix’s current trajectory as a return to durable compounding, supported by its global network of data centres and interconnection ecosystems.

Equinix, which operates a global footprint providing space, power, and connectivity services, closed at $1,065.39 per share on 21 August 2026. The stock has gained 36.17 per cent over the past 52 weeks, with a market capitalisation of $105.12 billion. Hedge fund interest in the company has also intensified, with 65 portfolios holding Equinix shares at the end of the first quarter of 2026, up from 51 in the preceding quarter.

Despite the specific conviction in Equinix, SGA’s broader portfolio performance lagged the market in the second quarter. The Global Growth Portfolio returned 7.4 per cent gross and 7.2 per cent net, underperforming the MSCI ACWI index, which returned 14.9 per cent, and the MSCI ACWI Growth Index, which rose 19.8 per cent. The firm attributes this underperformance to valuation compression driven by market sentiment rather than weaker business quality, noting that the portfolio is currently near its widest discount to the market since inception.

Fundamentals within the portfolio remain robust, with median revenue and earnings per share growth reaching 12 per cent and 14 per cent respectively. More than 60 per cent of the holdings beat earnings expectations during the period. SGA maintains that momentum leadership and enthusiasm around AI infrastructure, particularly in semiconductor, memory, and hardware stocks, drove much of the broader market gain, leaving its broader holdings to lag despite strong underlying performance.

Looking ahead, SGA continues to favour durable compounders and expects 16 per cent revenue growth and 20 per cent earnings growth over the next three years for its portfolio. The firm’s strategy remains focused on identifying companies where valuation discounts do not reflect the strength of their fundamental operations, a thesis it now applies to its renewed position in Equinix.