Over recent years, data centre operator NXT has been the local markets’ go-to for exposure, but in 2024, GMG and now Digico have afforded investors alternatives to diversify their exposure to the underlying trends. NXT raised $1.3bn at $15.40 in April 2024 to accelerate development and expansion projects across its Australian data centres, including significant upgrades in Sydney and Melbourne. This included projects like increasing the S3 Sydney data centre capacity to 50 megawatts and substantial investments in land acquisition and infrastructure across the Asia-Pacific region – the rush is on, a bit like the Australian gold rush back in the 1850’s.
We took a small 3% position in NXT last month, planning to add if we saw further weakness. We believe the time may have arrived, as buyers who missed out on Digico are likely to look for alternative exposure to the sector.
- We remain bullish on the data centre operator NXT (i.e. different to just a landlord), looking for an initial test of the $20 area – MM holds NXT in its Active Growth Portfolio.
MM is long and bullish towards NXT
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