NEXTDC (NXT) – Ramping Up

June 27, 2025

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.

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.

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

Insights that count

Discover the best opportunities to outperform the market. Our research team dig deep into the market, company and stock data to bring you insights others might overlook.

Transurban Group (TCL) – Hands on the wheel

Transurban Group owns and operates more than 20 toll roads in Melbourne, Sydney, Brisbane, the Greater Washington region in the US, and in Montreal, Canada.

Learn More

Goodman Group (GMG) – Growing pipeline

Goodman Group develops and operates logistics properties and data centres in major cities across Australia, New Zealand, Asia, Europe, the UK and the Americas.

Learn More

GQG Partners (GQG) – Outflows persist

GQG Partners operates as a boutique asset management company in global markets.

Learn More

Want to keep up to
date on our latest news & insights

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.