Australian AI data centre operator NextDC shares shed 44% on revenue delay

Australian data centre operator NextDC witnessed a 44% drop in its shares value on Wednesday following the company's announcement of delayed revenue forecasts and postponement of future developments. The decision was triggered by electricity network upgrades at one of its Melbourne data centres, which would delay A$140 million worth of contracted customer revenue for the financial year.

NextDC plans to suspend all new development projects and land acquisitions while evaluating capital recycling opportunities, potentially including the sale of selected sites. The stock dropped to its lowest level since January 18 and became the biggest loser on the broader ASX200 benchmark index. Despite growing investments in data centre operators driven by expectations of AI-driven spending on digital infrastructure, sentiment has weakened as investors question the feasibility of massive AI spending amidst surging computing, land, and power costs.

NextDC's revised 2027 net revenue outlook now stands between A$475 million and A$500 million, down from A$615 million to A$640 million, while its earnings before interest, taxes, depreciation, and amortisation (EBITDA) forecast is between A$245 million and A$265 million, from A$385 million to A$410 million. The delays in the M3 Melbourne data centre's power supply are attributed to community and stakeholder opposition, causing a further strain on investor confidence in AI-linked companies.