NXT has been at the forefront of local data centre expansion, but over the last year, solid alternatives have arisen for ASX investors in the form of GMG and DGT. Encouragingly, Goldman has just added NXT to its APAC Conviction list as they foresee ongoing demand for digital infrastructure. However, one very real risk with NXT is another capital raise as they race to maintain their expansion plans with increasing competition; they already executed two in 2024 and one in 2023, with expansion requiring a big bank balance. After the company disappointed the market in February after missing analyst estimates with its contract utilisation numbers, although it maintained earnings guidance of $210- 220mn, it’s no longer our preferred exposure to the space.
- We exited NXT before its April plunge, but at around $12 and AI confidence returning, we believe the stock is now offering value. However, we prefer GMG and even DGT in the space.
MM is cautiously bullish NXT
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