W
e recently compiled a list of the best real estate stocks for beginners, and Equinix, Inc. (NASDAQ:EQIX) is one of the top picks. The Federal Reserve's interest rate cuts have sparked debate about their impact on the housing market. While some experts believe lower rates will motivate more people to buy homes, others think it could drive up prices due to increased demand.
Industry experts like Selma Hepp and Meredith Whitney agree that mortgage rates need to fall further for the market to be healthy again. Hepp notes that a 15% drop in home prices would make the market more affordable, while Whitney suggests that rates need to decrease by another 50-100 base points. On the other hand, Gil Borok, CEO of Colliers U.S. and Latin America, believes the rate cut will boost commercial real estate and spur new investment sales activity.
Analysts also see a positive impact on the supply side, as lower mortgage rates are expected to ease financing conditions for homebuilders, leading to increased production. With another potential half-point reduction before year's end, builder sentiment could improve significantly.
Our methodology involves selecting stocks with high market capitalization and popularity among elite hedge funds. We used the Finviz screener to create a list of 25 real estate stocks and chose the top 11 based on their appeal to hedge funds. Equinix Inc. (NASDAQ:EQIX) ranks third on our list, with 56 hedge fund holders.
Equinix is one of the largest digital infrastructure companies globally, specializing in Internet connection and data centers. It operates in 33 countries and provides access to over 2,000 network services, 3,000 cloud and IT services, and more than 4,800 enterprises. The company has a remarkable financial performance, with 86 consecutive quarters of top-line revenue growth.
During the fiscal second quarter, Equinix witnessed record gross bookings and adjusted EBITDA crossing the $1 billion quarterly threshold for the first time. Net income increased 45% year-over-year to $301 million. With 54 major projects underway across 24 countries, Equinix is well-positioned to drive its growth and profitability.
While we acknowledge EQIX's potential as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns within a shorter timeframe.
