Equinix Shares Popped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of data center operator Equinix (NAS: EQIX) jumped as high as 10% overnight on heavy trading, thanks to a fine second-quarter report.

So what: $0.65 of adjusted earnings per share on sales of $395 million easily eclipsed estimates of $0.48 and $380 million, respectively. The gravy train is expected to keep rolling in the third quarter as sales guidance topped expectations alongside increased EBITDA profits, which should translate into EPS growth as well.

Now what: Equinix is in the habit of beating the Street, and it's easy to see why: its services are a perfect fit for the new hands-off paradigm of data center management in the cloud-computing era. Just as Netflix (NAS: NFLX) has outsourced its systems administration to cloud services from Amazon.com (NAS: AMZN) , cloud services are a large part of the Equinix puzzle. Networking giants Verizon (NYS: VZ) and CenturyLink (NYS: CTL) have recently beefed up their cloud operations by acquiring players in that space. Equinix could easily be the next buyout target. To learn more about the exciting business opportunities and investment angles in cloud computing, just click here to watch a short video about it.

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At the time thisarticle was published Fool contributor Anders Bylund owns shares of Netflix, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Netflix and Amazon.com. Motley Fool newsletter services have recommended buying puts in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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