One of the first internet infrastructure companies to report earnings will be Equinix on Wednesday. Nortia Research has a nice writeup of the financials and expectations on the company, it is worth a read. I think it may be smart to pay attention to what Equinix says this quarter, because they represent one of the few bright lights out there given that they have largely maintained their valuation in a very tough environment.
They have earned that valuation by maintaining their focus, executing their business, and thus fulfilling or exceeding expectations (see Q1). The datacenter business has been hot, but not everyone is reaping the benefits yet. One only has to look at competitors Internap and Savvis to see how poor execution has been punished in the stock market over the last year despite expansion plans in favorable colocation/hosting market.
So if Equinix misses and warns of economic dangers ahead, then I think we're going to be hearing alot of shrill voices from other internet infrastructure players in coming weeks. On the other hand, if they continue to plow ahead successfully, it may show that the headwinds in this sector haven't gotten any worse and thus a recovery may be reasonable to hope for amongst others in the sector from Internap and Savvis on up to Level 3 - all of whom are trying to regain the trust of the market.
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