Michael Elias

Michael Elias asked about enterprise AI demand, specifically for 5-15 MW capacity blocks, whether Digital Realty is seeing a pickup in such activity, and if this is a leading indicator for more inference-specific demand.

Answer

President and CEO Andy Power explained that Digital Realty's strategy is to build attractive ecosystems for its 5,000+ customers, curating buildings with multiple clients. CFO Matt Mercier (who spoke instead of Colin McLean as indicated in the transcript) highlighted a strong 0-1 MW pipeline, including larger contiguous blocks above 500 kW, and emerging conversations around 5 MW blocks for inference. He emphasized Digital Realty's heritage in supporting mixed densities, global connectivity, and its private AI connectivity story as key value propositions for enterprise clients.

Michael Elias asked about enterprise AI demand, specifically for 5-15 MW capacity blocks, and if this activity is a leading indicator for more inference-specific demand.

Answer

President and CEO Andy Power stated this aligns with Digital Realty's strategy of building ecosystems for diverse customers. CFO Matt Mercier highlighted record Q4 performance in 0-1 MW, a strong pipeline, and increasing enterprise client interest in contiguous blocks above 500 kW, with emerging conversations around 5 MW blocks for inference. He noted Digital Realty's heritage in supporting mixed densities and global connectivity, and the positive impact of their private AI connectivity story.

Michael Elias of TD Cowen requested an update on the Charlotte market, specifically regarding power availability and customer conversations. He also asked about the nature of the enterprise pipeline for deals larger than 20 megawatts.

Answer

CIO Greg Wright confirmed that the Charlotte development is on track, with strong customer interest. Chief Revenue Officer Colin McLean noted that while the overall enterprise pipeline is at a record high and deal sizes are increasing, demand for blocks over 20 megawatts from enterprises is more sporadic compared to hyperscalers.

Michael Elias from TD Cowen asked for an update on the Teraco and Ascenty investments, specifically regarding the put-call option for the remaining Teraco stake and the current status of Ascenty.

Answer

CIO Gregory Wright explained that for Teraco, a put-call mechanism for the remaining stake begins in mid-2026. He praised Teraco's strong performance and market position. Regarding Ascenty, he stated the business and its partnership with Brookfield are performing well, with the team successfully expanding its enterprise business alongside its traditional hyperscale focus. He confirmed there are no exit rights associated with the Ascenty investment.

Michael Elias of TD Cowen asked for a prognosis on where development yields and spot market pricing for hyperscale deals are heading, particularly in relation to where the private market is clearing deals.

Answer

CEO Andrew Power expressed confidence that Digital Realty can maintain returns a couple of hundred basis points higher than the average competitor. He acknowledged that while private market returns are healthy, Digital Realty's ability to be selective and not chase volume at the expense of price allows them to achieve superior yields on their valuable, well-located capacity.

Michael Elias asked about the drivers behind the exceptional enterprise bookings, questioning if it was due to a better market backdrop or a shift in go-to-market strategy, and also inquired about pricing power with these customers.

Answer

President and CEO Andy Power attributed the success to a multi-year strategic transformation, not a single quarter's event, and noted healthy 4.5% cash mark-to-markets in the 0-1MW segment. CRO Colin McLean added that platform enhancements, like new assets in key markets, are attracting more enterprises, with record 'export' activity proving the platform's value.

Michael Elias (TD Cowen) requested a breakdown of Mueller Water Products' market exposures for the quarter, specifically the contributions from municipal repair and replacement, new residential builds, and gas and technology segments (meters, leak detection), and how these assumptions inform the guidance for the remainder of the year. He followed up by asking for more specific growth rate expectations for Mueller Water Products' key markets, including residential construction, municipal repair and replacement, and project-related work with specialty valves, to better understand the underlying assumptions for the full-year guidance.

Answer

Melissa Rasmussen (CFO) stated that the quarter's 4.6% growth was due to higher pricing and slightly lower volumes, with volume growth in specialty valves and hydrants offsetting decreases in service brass and natural gas/repair. For the remainder of the year, she expects resilient end markets, with a high single-digit decrease in residential construction, low to mid-single-digit growth in municipal repair and replacement, and mid to high single-digit growth in project-related work with specialty valves.

Michael Elias requested a detailed breakdown of Mueller Water Products' market exposures, including repair and replacement, new builds, gas, and technology segments for the quarter, and how these assumptions are contextualized in the full-year guidance.

Answer

Melissa Rasmussen, CFO, explained that Q1 growth was driven by higher pricing and slightly lower volumes, with volume growth in specialty valves and hydrants offsetting decreases in service brass and natural gas/repair. For the full year, she expects consolidated growth driven by slightly positive volumes and low to mid-single-digit price realization, with healthy municipal and strong specialty valve growth offsetting residential impacts. She further detailed market growth rates: a high single-digit decrease in residential construction, low to mid-single-digit growth in municipal repair and replacement, and mid to high single-digit growth in project-related specialty valves.

Michael Elias asked about the scale of training workloads in China, specifically if GDS is seeing opportunities in the gigawatt range similar to the U.S. He also inquired about the time to build AI data centers compared to traditional cloud data centers and any notable constraints or long lead time items.

Answer

William Huang, GDS Founder, Chairman, and CEO, confirmed that major clients are discussing gigawatt-level new demand for training workloads in China, mirroring trends seen in the U.S. three years prior. He stated that data centers in China can be built very quickly, typically 9-12 months from piling to delivery, with records as fast as 8 months, and noted no significant bottlenecks or supply chain issues.

Michael Elias inquired about the scale of AI training workloads in China (gigawatt range), the time to build AI data centers compared to traditional cloud data centers, and any notable constraints or long lead time items.

Answer

William Huang (Founder, Chairman and CEO) confirmed that clients are discussing gigawatt-level new demand for AI training in China, similar to the U.S. He stated that data centers can be built very fast in China, typically 9-12 months from piling to delivery, with extreme cases within 8 months, and noted no bottlenecks or supply chain issues for development.

Michael Elias asked about the planned split for the Chicago Manuka campus between xScale and retail capacity, and whether Equinix would consider offering xScale capacity to large enterprise customers, such as banks, in addition to hyperscalers.

Answer

Adaire Fox-Martin, President and CEO of Equinix, confirmed that mega campuses consider co-locating xScale with retail, which adds value to all participants. She noted that financial services were a dominant sector in Q3, driven by emerging requirements like DORA regulation. Equinix's capacity is fungible, and they would consider servicing large enterprise footprints through available xScale capacity. Keith Taylor, CFO of Equinix, added that the team evaluates the best structure for both the partnership and retail business, aiming to retain a certain amount of capacity for the retail portfolio in larger markets like Chicago, London, and Amsterdam.

Michael Elias asked for clarification on the retail versus xScale split for the Chicago Manuka campus and whether xScale capacity would be exclusively for hyperscale customers or also available to large enterprise clients like banks.

Answer

Adaire Fox-Martin, President and CEO of Equinix, confirmed that mega campuses are designed to co-locate xScale and retail, adding value to all participants. She noted strong demand from financial services, partly driven by regulations like DORA, and stated that xScale capacity could be fungible for large enterprise customers if available. Keith Taylor, CFO of Equinix, added that the Manuka campus offers hundreds of megawatts, and the team strategically bifurcates land to ensure a portion remains in the retail portfolio while another goes to xScale, citing Amsterdam as another large opportunity.

Michael Elias of TD Cowen asked if pre-buying equipment could smooth CapEx and boost future AFFO growth, and requested more color on the customer demand signals underpinning the 'Build Bolder' initiative.

Answer

CEO Adair Fox-Martin highlighted strong demand signals, including trends toward distributed workloads, increased power density, and larger enterprise deployments for AI. CFO Keith Taylor addressed the financial question, explaining that while pre-buys shift spending, the overall scale of investment means it won't meaningfully alter the AFFO outlook, for which operating performance remains the key driver.

Michael Elias of TD Cowen asked if pre-buying equipment could smooth the CapEx curve to improve 2026 AFFO growth and requested more color on the customer demand signals underpinning the 'Build Bolder' initiative.

Answer

CEO Adair Fox-Martin detailed customer demand signals, including trends toward distributed workloads, increased density, and AI-driven use cases requiring data privacy and secure interconnection. CFO Keith Taylor addressed the financial question, stating that while pre-buys have a marginal impact, the primary drivers of AFFO growth remain strong operating performance and efficient debt management, not the timing of specific capital purchases.

Michael Elias inquired about pre-leasing activity for the over 9,000 cabinets scheduled for delivery in Q4 2025 and what that suggests for the 2026 growth trajectory.

Answer

CEO and President Adaire Fox-Martin confirmed that Equinix experienced presale activity in Q1, similar to late 2024, with customers committing to capacity further out on the delivery roadmap to secure their compute and energy future. She affirmed that the company closely manages the ready-for-service dates for all new capacity coming online.

Michael Elias inquired about recent order wins, specifically highlighting bus bars, cabling, and backplane content. He also asked what types of customers are currently driving the most order activity, distinguishing between GPUs, custom ASICs, and hyperscalers.

Answer

CEO Terrence Curtin stated that order wins are broad across the product set, with varying strengths with different customers for specific product sets. He confirmed that the bulk of the revenue traction and ramp is primarily with hyperscalers, including those with custom TPUs and GPUs, and also includes semi players. He noted that TE Connectivity competes individually on each product set as architectures evolve in real-time.

Michael Elias asked about the timeline for bringing new production capacity online, from the decision to expand to the first unit coming off the lot, and the earliest point at which Vertiv can book into this new capacity, given the accelerating data center demand.

Answer

CEO Giordano Albertazzi explained that the time to revenue for new capacity varies from a few months for line reconfigurations to 12-15 months for larger expansions requiring new construction. He highlighted that expanding existing facilities offers speed due to established systems and experienced teams, and capacity is built 6 to 12 months ahead of demand, based on backlog and pipeline visibility.

Michael Elias highlighted the massive acceleration in data center demand and asked about the time it takes from Vertiv's decision to expand capacity to the first unit coming off the line, and the earliest point at which new capacity can be booked, given the urgent need for equipment.

Answer

Giordano Albertazzi, CEO of Vertiv, affirmed the strong market trajectory. He explained that capacity expansion is an ongoing process, leveraging existing latent capacity and expanding existing sites. The time to first unit can range from a few months for line reconfiguration (3-5 months) to 12 months for larger, new construction. Expanding existing facilities offers speed due to established systems and teams. Vertiv builds capacity 6-12 months ahead of demand, based on backlog and pipeline visibility.

Michael Elias of TD Cowen asked how Vertiv's product footprint needs to evolve to keep pace with data center trends like directing medium voltage to the rack and rising rack densities.

Answer

CEO Giordano Albertazzi confirmed these trends are on Vertiv's roadmaps and that power infrastructure will evolve much like thermal has. He highlighted the company's deep DC power expertise and its close collaboration with key industry players to define future architectures, emphasizing the growing importance of an orchestrated system from generation to rack.

Michael Elias of TD Cowen asked how Vertiv's product portfolio is evolving to address emerging data center trends like medium voltage power to the rack and rack densities approaching two megawatts.

Answer

CEO Giordano Albertazzi confirmed these trends are on Vertiv's technology roadmaps and that power infrastructure will evolve significantly. He noted Vertiv is leveraging its DC power expertise and collaborating with silicon and hyperscale partners to define future architectures, connecting this evolution to the broader trend of power self-sufficiency in data centers.

Michael Elias of TD Cowen asked for confirmation that the demand pipeline entering Q4 was higher than when entering Q3, and questioned if elongating customer lead times could negatively impact Vertiv's pricing power.

Answer

CEO Giordano Albertazzi gave a resounding 'yes' to confirm that the pipeline entering Q4 is higher than it was entering Q3. He stated that Vertiv does not see a correlation between longer lead times and reduced pricing power, noting that the elongation is driven by customer project schedules and actually provides benefits for supply chain planning.

Michael Elias of TD Cowen inquired about the scaling of AI inference workloads, how DigitalBridge is positioned to capture this emerging demand, and the expected financial results and return profile compared to the AI training phase.

Answer

CEO Marc Ganzi explained that the market is in the "bottom of the first inning" for inference, which favors highly interconnected, high-power capacity platforms like DataBank and Switch. He noted that inference architecture differs from traditional cloud edge, requiring larger power deployments. Ganzi highlighted that these edge deployments can create a customer ecosystem, driving higher returns, citing a campus in Utah with levered returns "well north of 30%." He emphasized that DigitalBridge's ability to deliver power today is a key differentiator for winning these workloads.

Michael Elias asked about the strength of DigitalBridge's data center leasing pipeline entering 2025 compared to the prior year and inquired about the outlook for hyperscale data center development yields and pricing.

Answer

CEO Marc Ganzi confirmed that the data center leasing pipeline is up 22% year-over-year to over 6.2 gigawatts. He emphasized that the entire digital ecosystem is performing well, with fiber pipelines up over 50%. Ganzi stated that development yields have stabilized in the double-digit range for their strategic projects and have not retreated, as the company avoids chasing lower-yield deals. He added that their ability to tap securitization markets helps preserve these returns.