NXT –41.72%: Has reopened after its trading halt, with the update worse than initially feared. The delay to power supply at its M3 Melbourne data centre has management guiding FY27 earnings ~35% lower. The bigger concern is the length of the delay, with work on the power connection not expected to restart until February.
Key details:
- FY27 Revenue guidance cut from A$615-640m down to A$475-500m
- FY27 EBITDA guidance cut from A$385-410m down to A$245–265m.
- F27 Capex guidance A$5.25-5.75bn down to A$4.5-5bn.
Last week, we viewed NXT as being in an accumulation zone, while warning that deteriorating sentiment could drag the shares towards their 2025 low. Today’s update reinforces that risk. The direct earnings impact is meaningful, but the broader issue is whether community opposition and power constraints become a more persistent obstacle to Australia’s data-centre build-out.
We remain constructive on the long-term demand for AI infrastructure, but demand alone does not guarantee attractive returns, and timing is everything at the moment in this space. With NXT carrying a capital-intensive development pipeline and significant debt, delays matter – they push out earnings while capital remains tied up. We would be cautious about assuming the share price weakness is automatically a buying opportunity until there is greater clarity on the M3 timeline and the implications for future developments.
MM remains neutral toward NXT
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