NEXTDC (NXT) – Ramping Up

NEXTDC develops and operates data centres in Australia and the Asia-Pacific region. The company was incorporated in 2010 and is headquartered in Brisbane, Australia.

NextDC announced contract wins for another 16 megawatts (MW)of IT capacity, taking its total contracted utilisation to 244MW, with the largest increase coming from its Kuala Lumpur project (KL1) in Malaysia, which is scheduled to go live in early 2026.

The 10MW contract at KL1 was won from an unnamed hyperscaler, i.e. companies such as Amazon Web Services (AWS) or Microsoft Azure that provide large-scale cloud-computing services. The other 6MW of announced new IT capacity is probably related to NextDC’s centres at Tullamarine and West Footscray in Melbourne. In Ord Minnett’s view, this is a good sign as it suggests an accelerated ramp-up of billing from these centres.

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Incorporating the additional revenue from KL1 and a faster revenue conversion from the Melbourne centres drives a modest $10 million upgrade in our forecast for FY27 operating earnings to $321 million. It is worth noting, however, that this outcome still implies an almost 40% year-on-year increase from FY26. Our FY28 estimates are unchanged at this time.

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We reiterate our Buy recommendation on NextDC and maintain a target price of $18.00.