Shares in data centre operator NEXTDC Ltd (ASX: NXT) surged on Tuesday, climbing 7.66% to $13.63 in midday trade after the company announced a record-breaking rise in contracted utilisation and forward order book growth. The stock’s rally adds to a strong one-week gain of 19.56% and a one-month increase of 27.98%, reflecting growing investor confidence in the company’s AI-driven expansion strategy.
NEXTDC Ltd share surged on Tuesday, climbing 7.66% to $13.63 in midday trade [Market Index]
Despite this sharp rebound, NEXTDC’s stock remains down 9.56% year-to-date and 20.01% over the past 12 months, highlighting the challenges it has faced in a volatile tech market. However, the recent announcement could mark a pivotal turning point as the company positions itself at the forefront of the AI and hyperscale infrastructure boom.
AI Demand Powers Record Utilisation Surge
In an ASX release dated 6 May 2025, NEXTDC revealed that its pro forma contracted utilisation had jumped by 52 megawatts (MW), or 30%, since 31 December 2024. This brings total contracted utilisation to 228MW—representing the largest quarterly increase in the company’s history.
NEXTDC (ASX: NXT) Shares Rally After Landmark AI Contract Wins [NEXTDC]
The growth has been primarily fuelled by a wave of new customer contracts focused on high-performance computing and artificial intelligence workloads. The company noted that its Victorian data centre ecosystem, in particular, has benefited the most from these deployments. As of 31 March 2025, Victoria alone accounted for 114MW of contracted utilisation—an astonishing 161% of its 70.5MW built capacity at the end of 2024.
Craig Scroggie, NEXTDC’s Chief Executive Officer and Managing Director, highlighted the structural shifts reshaping the industry:
“We are very pleased to have recorded the largest increase in contracted utilisation in the Company’s history. The rise of artificial intelligence and high-performance computing is reshaping the data centre industry at speed. Hyperscale customers are scaling AI-native infrastructure at unprecedented levels.”
Forward Order Book Hits All-Time High
NEXTDC’s pro forma forward order book has also reached new heights, increasing by 45MW or 54% since December to a total of 127MW as of 31 March 2025. The forward order book represents the difference between contracted utilisation and billing utilisation—providing visibility into the company’s future revenue stream.
The company expects most of the revenue from these recent customer wins to begin flowing through in FY27, with the full revenue run-rate to be realised by FY28. This strong pipeline reinforces NEXTDC’s long-term earnings potential as it continues to expand its infrastructure footprint.
Capex Boosted to Meet Soaring Demand
To keep up with customer demand and future-proof its operations, NEXTDC has increased its capital expenditure (capex) guidance for FY25 by A$100 million. The company now plans to spend between A$1.4 billion and A$1.6 billion this financial year—up from the previous range of A$1.3 billion to A$1.5 billion.
The additional investment will be used to accelerate planned inventory expansion, build new data halls, and deploy capacity needed to support incoming workloads. Despite this ramp-up in spending, NEXTDC has maintained its guidance for net revenue and underlying EBITDA for FY25, signalling confidence in its ability to manage growth efficiently.
Strong Financial Position Supports Growth Strategy
NEXTDC also reassured investors of its solid financial footing. As at 31 December 2024, the company held A$2.5 billion in liquidity, including cash reserves and undrawn debt facilities. Its gearing stood at just 8.8%, reflecting a conservative capital structure that leaves ample room for expansion.
Earlier this financial year, NEXTDC restructured and refinanced its senior debt facilities, establishing a new common terms deed platform. It now plans to raise additional senior debt to fully fund the capital expenditure required to support its new contracts.
Leading the Future of Data Infrastructure
NEXTDC continues to distinguish itself as a leader in the data centre space, operating Australia’s only network of Uptime Institute-certified Tier IV facilities. It is also the only operator in the Southern Hemisphere to achieve Tier IV Gold certification for operational sustainability.
Locations of Data Centres of NEXTDC across Australia [NEXTDC]
The company’s focus on renewable energy, energy efficiency, and sustainable operations aligns well with the increasing ESG expectations from enterprise and government clients. Its data centres are engineered to offer world-class operational efficiency and are certified carbon neutral under the Australian Government’s Climate Active program.
NEXTDC’s Cloud Centre ecosystem—a digital marketplace of carriers, cloud providers and IT service partners—further strengthens its value proposition by enabling customers to build scalable, hybrid cloud networks.
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Market Outlook: Positioned for the AI Era
NEXTDC’s latest update underscores a dramatic shift in the infrastructure demands of modern technology companies. With artificial intelligence, cloud computing, and hyperscale growth accelerating globally, NEXTDC is strategically positioned to capitalise on these trends.
Though its share price has underperformed in the past year, the recent contract wins, boosted guidance, and robust financials suggest that NEXTDC may be entering a new phase of growth. The company’s unique blend of cutting-edge infrastructure, strategic partnerships, and sustainable practices makes it one to watch as the tech sector continues to evolve.
Investor’s Outlook: Rebound in Sight?
Despite the recent surge in NEXTDC’s share price, long-term investors are still facing a mixed bag. As of 6 May 2025, NXT shares closed at $13.63—up 7.66% for the day, capping off a strong one-week performance of +19.56% and a +27.98% gain over the past month. This rebound has been fuelled by the company’s record-breaking growth in contracted utilisation and bullish outlook tied to AI-driven infrastructure demand.
However, looking further back, NEXTDC is still working to recover from a challenging year. Its 2025 year-to-date performance is down 9.56%, and over the past 12 months, the stock has fallen 20.01%. Compared to its sector peers and the broader market, it has underperformed significantly—down 31.60% versus the Technology sector average, and 25.73% against the ASX 200 benchmark over the same period.
That said, NEXTDC remains a heavyweight within the ASX. With a market capitalisation of approximately $8.73 billion, it ranks 66th out of 2,324 listed companies and holds the 6th position among 245 in the Technology sector. It also boasts 640.4 million shares on issue, further reflecting its scale and liquidity.
For investors seeking long-term exposure to Australia’s digital infrastructure and AI ecosystem, NEXTDC offers a compelling, albeit currently discounted, opportunity. Its latest operational update and aggressive growth strategy suggest that the company is well-positioned to bounce back from its recent underperformance and benefit from the next wave of tech innovation.
