NEXTDC Shares Jump After Data Center Operator Wins New Contracts

NEXTDC Ltd. shares advanced after the Brisbane-based data-center operator said it had won new customer contracts, bolstering its contracted utilization by 11% in the three months to June.

The stock rose as much as 5%, the most since July 15, after pro-forma contracted utilization increased to 740 megawatts during the period, according to an exchange filing. The pro-forma forward order book has increased to 565 megawatts as a result of the new contract wins, it said.

Demand for data centers amid the artificial intelligence build-out has supported Australia and New Zealand’s burgeoning sector this year. NEXTDC shares have risen more than 8% year-to-date, while Wellington-listed peer Infratil Ltd. has surged 37%.

The sector has also attracted a wave of new funding, with NEXTDC’s A$1.5 billion ($1.1 billion) capital raise in April marking one of Australia’s largest equity offerings this year.

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The increase in contracted utilization “likely does not come as a surprise to investors as it lines up with Sharon AI Holdings Inc.’s requirement for 72 MWs from the recent Nvidia partnership announcement,” wrote Citigroup Inc. analysts led by Siraj Ahmed in a note. NEXTDC is contracted by US-listed neocloud Sharon AI to deploy cloud computing infrastructure across Australia.

NEXTDC’s net revenue, underlying earnings and capital expenditure guidance for the financial year ending June 30 remains unchanged. The forward order book is expected to progressively convert to revenue and earnings through to 2030, the filing said.