Macquarie Technology Shares Under Pressure, At Lowest Price In Years

Macquarie Technology shares (ASX: MAQ) fell to their lowest level in years yesterday, as markets continue to work through a combination of heavy capital expenditure commitments, compressed near-term earnings, and cautious FY27 guidance that has sent the stock down 15% in three weeks, and more than 21% since the start of the year.

The MAQ share price closed out 2.56% lower at A$53.70, after touching an intraday low of A$53.55, a level not seen since 2021. The sell-off reflects a broader re-rating of high-multiple, long-duration growth stocks on the ASX, particularly those where near-term monetisation of capital investment remains some quarters away.

Recent Results Fail To Shift Narrative

Macquarie Technology’s full-year FY26 results delivered a mixed picture. Revenue rose 5.5% to A$390.0 million, and EBITDA grew 2.0% to A$115.9 million, extending the company’s impressive streak to 12 consecutive years of EBITDA growth. However, statutory Net Profit After Tax fell 8.0% to A$32.1 million, with Basic EPS declining to A$1.25. Net margin contracted from 9.4% to 8.2%, a direct consequence of rising depreciation and financing costs tied to the company’s aggressive infrastructure build programme.

The headline that rattled markets most was management’s FY27 guidance, which pointed to only “modest EBITDA growth” in the year ahead. The company’s flagship IC3 SuperWest data centre development, a cornerstone of its long-term AI and sovereign cloud infrastructure strategy, is not expected to generate meaningful revenue from Phase 1 until the second half of FY27. That timing gap is a key source of near-term earnings pressure.

Compounding the outlook, the Telecom division faces a structural headwind, with EBITDA in that segment expected to contract by A$2 million to A$3 million in FY27 due to NBN price cut pass-throughs and the ongoing industry-wide decline in traditional voice services.

The capital expenditure picture underscores just how aggressively MAQ is positioning itself for the AI infrastructure boom. Total FY27 capex is guided to reach A$485 million to A$506 million, more than double FY26’s A$230.5 million. This follows the company’s A$240 million acquisition of a 34,200 square metre site in Macquarie Park, Sydney, earmarked for the proposed Macquarie Engineering and Technology Campus (METC), a development with potential capacity of approximately 200 megawatts. Combined with existing pipeline assets, MAQ’s total planned capacity now stands at around 268MW, a substantial footprint by Australian standards.

Depreciation and amortisation is expected to swell to A$63 million to A$67 million in FY27 as new assets come onto the books, creating a further drag on statutory profit that markets are clearly finding difficult to look through in the current rate environment.

On the financing side, MAQ secured a significant vote of confidence from the Australian Government through a A$200 million investment from the National Reconstruction Fund Corporation (NRFC), structured as non-convertible subordinated perpetual securities. The deal is non-dilutive to existing shareholders and, combined with A$496.5 million in undrawn debt facilities, provides the company with substantial liquidity to fund its construction pipeline. Management has also indicated that negotiations with an anchor tenant for Phase 1 of IC3 SuperWest are “well progressed.”

Underpinning the revenue base is a high degree of contractual certainty, with approximately 95% of group revenue locked into contracted monthly recurring revenue arrangements, providing a degree of earnings visibility that distinguishes MAQ from more speculative technology plays.

What Lay Ahead

The central tension for MAQ shares at current levels is one of timing versus conviction. The long-term structural thesis of Australian sovereign AI infrastructure, cloud data centre demand, and government-backed capacity expansion remains largely intact. The near-term reality, however, is that the company is in the most capital-intensive phase of its history, with peak earnings dilution likely to persist through at least the first half of FY27 before IC3 SuperWest revenues begin to flow.

Markets appear to be applying a higher discount rate to those future cash flows in an environment where long-duration bond yields remain elevated, compressing the premium multiples that growth-oriented infrastructure stocks like MAQ had previously commanded. With analysts increasingly suggesting interest rates may be on the rise before a decline, there is a broader trade at play across the markets. Whether the current price represents an opportunity or a value trap will depend almost entirely on the pace at which contracted capacity translates into recognised revenue over the next 18 to 24 months.