NXT has been in the wrong place at the wrong time following the listing of DigiCo (DGT) and the massive capital raise by Goodman Group (GMG), diluting the available capital looking for a home on the ASX toward data centres, it was once just NXT’s domain. We bought weakness in NXT, but its continued, and we must question our thesis as questions arise around the increasing competition for capital in the space. A cashed-up GMG is not good for NXT.
US-based Meta recently announced plans to ramp up its AI infrastructure spending, allocating upwards of $40 billion to support its ambitions in artificial general intelligence. Amazon, Alphabet and Microsoft are not far behind, pouring billions into building, upgrading and acquiring data centres packed with high-end GPUs and custom AI chips. However, a growing chorus of researchers and technologists is beginning to ask a pointed question: what if we are preparing for a compute-heavy world that may never arrive? It is not an ideal backdrop for high-valuation stocks priced for growth in the space.
- We are becoming concerned about the size of our tilt towards Data Centre’s in our Growth Portfolio: MM owns NXT in our Active Growth Portfolio.
MM is now neutral towards NXT
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