Data center fundamentals a ind underlying secular drivers remain firmly intact. However, data center shares have traded 14-22% lower during the past month, continuing a trend of weakness that started in October 2020. We think this is an attractive point. Our industry view remains positive, and we reiterate our Overweight ratings EQIX DLR QTS, and SWCH Ye attribute share weakness to: 1) rotation from perceived outpefformers amid the pandemic to retur-to-norma/ stocks, 2) broader sell-off of high valuation tech companies, and 3)fears of inflation/rate hiking cycle. We see some rationale for sector rotation and a valuation-reset given emerging growth alternatives as lockdowns abat However, we find the impact of rising rates more nuanced than perceived by the market. Our examination of past hiking cycles indicated both the NAREIT index and S&P 500 appreciated 16% on average in the year following an initial Fed Funds rate hike The sample size is small, but data centers outperformed both indexes in the 2016 cycle Data centers now trade at -21x our 2021 AFFO estimate, compared to -25x a few weeks ago, creating an attractive entry point for exposure to quality earnings streams.

Results from 4020 were generally solid, with leasing momentum accelerating q/q for all six companies. Longer term we think secular dynamics (data proliferation and workload outsourcing )and company specific initiatives(value-added services, sales channel focus, footprint/p expansion)should contribute to% annual earning growth for the foreseeable future We highlight the following opportunities within our coverage universe EQIX(Ow-the industry's technology leader, with an expanding product array and geographic expansion. Shares now trade 22.3x our 2021E AFFO The 1. 5x turn premium to peers is narrow compared to historical trading DLR (OW)-access to attractive capital, skilful land/asset management, expansion in key international markets, and continuous enhancements to its technology offering keep us positive on DLRS growth prospects.

QTS(Ow)-leasing volume increased 44% y/y in 2020, which we attribute to WCH (o)-shares contracted 27% from the 2/10/21(vs S&P-23%)high in response to two 4Q20 churn events. The reaction is overblown, in our view CONE (EW)- Leasing rebounded in 4Q20, instilling confidence in the new management team-but strategic imperatives remain undefined.

COR(UW)-THE company has a compelling technology offering, but eamings growth is below the peer average and churn/backfilling remains an overhang.