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

  • Citi analyst Michael Rollins noted data center stocks Equinix, Inc EQIXDigital Realty Trust, Inc DLRCyxtera 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 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.

Posted In: BriefsJim ChanosAnalyst ColorNewsShort SellersReiterationSmall CapAnalyst RatingsTech

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.