Citi Remains Unfazed By Enron Collapse Predictor's Bearishness On These Data Center Stocks

Citi analyst Michael Rollins noted data center stocks Equinix, Inc EQIX, Digital Realty Trust, Inc DLR, Cyxtera Technologies, Inc CYXT were down an average of >5% on July 1 on reports (including Financial Times) that an investor is "betting against 'legacy' data centers that now face growing competition from the trio of tech giants that have been their biggest customers..."
Short-seller Jim Chanos betted against "legacy" data centers that now face growing competition from the trio of tech giants that have been their biggest customers.
The giants included Amazon.com Inc AMZN Amazon Web Services, Alphabet Inc GOOG GOOG Google Cloud, and Microsoft Corp MSFT Azure.
Chanos, known for predicting the collapse of energy group Enron, raised several hundred million dollars for a fund that will take short positions in U.S.-listed real estate investment trusts.
Rollins does not see any new risks for the category. He believes the sizeable hyper-scale cloud customers will likely stay customers and competitors within the data center ecosystem as many enterprise firms seem likely to employ hybrid-cloud architectures.
The concerns raised by the article do not meaningfully change his generally positive demand outlook.
He prefers retail-centric data center assets that can differentiate their portfolios around ecosystems and high levels of connectivity (network & cloud).
Buy-rated EQIX remains his top data center pick, while he maintained Buy on DLR and Neutral on CYXT.
Price Action: EQIX shares traded higher by 1.47% at $666.65 on the last check Friday.