NEXTDC is essentially a leveraged play on the AI and cloud infrastructure buildout. The company spends large amounts of capital constructing data centres, then generates long-duration, recurring revenue streams from customers who rely on those facilities to run mission-critical digital infrastructure, creating a model that increasingly resembles infrastructure investing rather than traditional technology. NXT offers direct exposure to the accelerating demand for data centres, cloud computing and AI infrastructure, providing greater upside if utilisation and pricing continue to strengthen. The trade-off is a more capital-intensive business model, ongoing funding requirements and no meaningful income stream for investors.
- As recently as April, NXT tapped the market for fresh funds, and we covered the stock and raise in detail at the time here.
We were “cautiously bullish” at the time, which has proved far too conservative, with buyers already up more than +20%, and the stock looking on track to push higher through 2026.
Goodman Group (ASX: GMG), by comparison, provides exposure to the same structural theme through a diversified global property platform that is already highly profitable, generates recurring income and pays dividends. For investors seeking a more balanced risk-reward profile, we continue to favour Goodman, while those with a higher conviction view on the AI infrastructure buildout, NXT offers greater operational leverage.
- We like NXT and the data centre thematic, but are currently exposed to the space through Goodman Group (GMG).
MM is bullish towards NXT around $15.50
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