NextDC Ltd
(ASX: NXT)Share Price and News
About NextDC (ASX:NXT)
NextDC is the biggest data centre stock on the ASX and the second biggest in Oceania after Equinix. As of 31 December 2024, it has 176MW contracted utilisation across more than a dozen data centres across Australia. It is planning expansion into New Zealand and Asia in the coming years with centres in Singapore, Japan, Malaysia and Thailand under development or in evaluation.
NextDC's Company History
NextDC was founded in 2010 by Bevan Slattery to meet Australia's increasing demand for data centre services. The company listed on the ASX early that year to raise funds to develop data centres in Brisbane and Melbourne.
NextDC listed early in its life because of the extreme amount of capital needed and difficulty of sourcing it from private markets back then. Some of it was funded by Slattery’s sale of Pipe Networks for $373m in 2010, but it needed further capital. When the company listed, it raised $40m at $1 per share in a deal valuing the company at $80m. It is now worth over $8.5bn - impressive.
The initial centres laid the foundation for a secure and impartial network of facilities. In 2012, Slattery stood aside and Craig Scroggie became CEO, a position he still holds today.
NextDC has developed new facilities in Sydney, Perth, and Canberra to support enterprise needs across business and government sectors. Significant milestones include obtaining Tier III and Tier IV certifications, recognised for energy-efficient, reliable, and uninterrupted operations. NextDC also connected users directly to major cloud platforms to support Australia's digital development.
More recently, NextDC entered a new growth phase by building hyperscale-ready data centres such as M3 in Melbourne and S4 in Sydney. The company has new projects overseas including in Japan, Malaysia, and New Zealand.
Future Outlook of NEXTDC (ASX: NXT)
NextDC has a big opportunity ahead of it, in expanding overseas. Last year it raised $600m for new data centres in Auckland and Kuala Lumpur.
The long-term demand for secure data storage, improved cybersecurity, and AI adoption is driving growth in data centres. Expanding into international markets diversifies NEXTDC's revenue sources and customer base in the Asia-Pacific region.
The trouble is that data centres need a lot of upfront capex, but they can generate revenue fast once operational. All things considered, NEXTDC's solid finances, consistent earnings, and proven strategies position it for further growth.
Is NXT a Good Stock to Buy?
To make a long story short, NXT suits investors willing to commit for the long term and accept short-term volatility in exchange for future growth potential.
Access to digital trends, a stable customer base, and planned regional expansion support this outlook, although increased competition and scale bring operational challenges in a fast-changing industry.
The risks include a potential need for capital down the track, and new sovereign risks as its expands into overseas markets. FY26-27 are expected to be the years when revenues from the new data centres overseas will be reflected.
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Frequently Asked Questions
NEXTDC builds and operates data centres that enable businesses to host their IT systems in secure, reliable, and high-performance environments. It also connects customers to cloud and telecom providers.