Data centers to remain pressured on DeepSeek fears, says Barclays

Barclays analyst Brendan Lynch has believed that data center multiples were vulnerable to any shift in narrative around artificial intelligence spending. DeepSeek presents that risk, and the group’s trading multiples will remain under pressure, the analyst tells investors in a research note. The firm says that if the DeepSeek news is confirmed, it appears high-quality AI models can be built using much less infrastructure and at a fraction of the cost that U.S. hyperscalers have been dedicating to this initiative. The hundreds of billions of dollars dedicated to AI development, therefore, “appears misguided and hyperscalers capital spending plans could be reconsidered,” according to Barclays. It believes trading multiples among the data centers are likely to contract in the near term. The firm has an Equal Weight rating on Equinix (EQIX), Underweight rating on Digital Realty (DLR), and Overweight rating on Iron Mountain (IRM).