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Highlights

  • Macquarie retains Outperform rating on NXT with 24% upside potential.
  • NextDC’s infrastructure supports AI workloads requiring advanced cooling solutions.
  • 17 operational data centres with seven more under development across Asia-Pacific.

NextDC Ltd (ASX:NXT) shares have gained significant attention among retail investors, coinciding with the growing adoption of artificial intelligence (AI). The company provides the data centre services and cloud connectivity infrastructure that form the physical backbone of AI systems. High-performance AI workloads, often reliant on GPUs, require advanced cooling solutions, an area where NextDC’s infrastructure plays a key role.

The company currently operates 17 data centres across Australia, Malaysia, and New Zealand, with a further seven facilities under development or planning. Since reaching a 52-week low of AUD 9.40 in April, NextDC shares have surged nearly 70%, closing at AUD 16.89 recently.

Analyst Perspective
In a 26 September research note titled AI Capex & Lessons from the Internet Boom, Macquarie Group Ltd (ASX: MQG) highlighted the ongoing AI capital expenditure and its implications for Australian-listed stocks. NextDC was named among Macquarie’s top three ASX-listed companies benefiting from the AI investment cycle.

Following up on 1 October, Macquarie released a dedicated research note on NextDC, retaining its Outperform rating with a price target of AUD 20.90. Based on the latest closing price, this indicates an estimated 24% upside. The broker noted that while NextDC operates in a capital-intensive environment, the return on invested capital (ROIC) exceeds the weighted average cost of capital (WACC), implying investments are generating positive economic value.

Macquarie also highlighted NextDC’s competitive positioning: customers typically require capacity within three to six months of signing a contract. NextDC’s ability to prepare sites and deliver capacity rapidly is viewed as a key component of its competitive advantage, albeit with a higher risk profile relative to fully pre-leased developments.

Operational Highlights

  • Capital deployment focused on AI-related contracts.
  • Emphasis on delivering infrastructure quickly to meet customer demand.
  • Ongoing expansion includes seven data centres under construction or planning.