Megaport Shares Continue Higher As Retail Offering Opens: The Latest

Megaport shares sit at A$18.42 today, up 2.05% towards the close, extending a remarkable rally that has seen the stock climb 15% since the company emerged from a trading halt last week, with the retail entitlement now open. The sharp appreciation pushed the relative strength index above 90 earlier this week, making MP1 the most overbought stocks on the ASX for a time. A 5.2% pullback yesterday cooled technical indicators slightly, with the RSI now sitting around 80, though the stock remains in stretched territory by conventional momentum measures.

The current Megaport share price represents a substantial premium to the A$14.30 offer price at which the company is raising capital, suggesting markets have enthusiastically endorsed management’s strategic pivot toward AI compute infrastructure.

The MP1 Raise

Megaport is executing a fully underwritten, one-for-3.08 pro-rata non-renounceable entitlement offer that will inject approximately A$827 million into the business. The institutional component of the raise closed last week, generating around A$518 million with a take-up rate of approximately 99%, a resounding vote of confidence from the company’s largest shareholders. The retail entitlement offer opened this week and is targeting a further A$309 million, giving eligible shareholders the opportunity to purchase new shares at the same A$14.30 price as institutions, representing a 13.9% discount to the pre-offer close.

Retail shareholders who fully subscribe to their entitlement can also apply for additional shares through a top-up facility that allows applications for up to 50% more than their base allocation, though there is no guarantee all oversubscription requests will be met. The retail offer is scheduled to close at 5:00pm Sydney time on Monday, 29 June 2026, with new shares expected to settle and commence trading in early July.

The capital raise will increase Megaport’s share count by approximately 32%, issuing roughly 57.9 million new shares. While the dilution is material, the company argues the funding is essential to capture what management views as a once-in-a-generation opportunity in AI infrastructure. Pro forma liquidity following the offer is estimated at approximately A$287.6 million, after accounting for the substantial capital expenditure required to fulfil new contracts and build out the company’s GPU pool.

The News Driving Price

The catalyst for the capital raise is a quartet of newly secured AI infrastructure contracts with a combined total contract value of approximately A$458.9 million. These agreements, which support AI inference workloads for enterprise and potentially sovereign customers, will require Megaport to deploy around A$366 million to A$369.5 million in capital expenditure, primarily for NVIDIA graphics processing units, networking equipment, and storage infrastructure.

In parallel, Megaport is constructing what it calls a GPU Pool, a globally distributed, on-demand AI inference cloud built across its existing network of more than 1,100 connected data centres spanning 31 countries. This GPU pool represents an incremental capital commitment of roughly A$350 million, bringing total AI-related capex to over A$700 million. The initiative marks a significant strategic shift for Megaport, which has historically operated an asset-light model focused on network interconnection services. The company is now taking on utilisation risk by owning and operating compute infrastructure directly, betting that demand for distributed AI inference will justify the substantial upfront investment.

Management has indicated it is targeting a payback period of 16 to 22 months on the GPU investments at optimal utilisation rates. The GPU pool strategy leverages Megaport’s existing global fabric and is designed to offer customers low-latency AI inference capabilities closer to the edge, differentiating the service from hyperscaler offerings that are often concentrated in a smaller number of large data centres.

Guidance Tightened

Alongside the capital raise announcement, Megaport tightened its FY26 revenue guidance to a range of A$307 million to A$315 million, narrowing from a previously wider band. The tighter guidance suggests improved visibility into contract pipelines and operational performance as the company scales its AI initiatives.

The company’s recent financial performance has shown encouraging momentum. Megaport reported record revenue and achieved its first net profit in the second half of 2024, marking an inflection point for a business that has historically prioritised growth over near-term profitability. The integration of Latitude.sh, acquired in November 2025 for approximately A$200 million in a separate equity raise, has accelerated the company’s on-demand recurring revenue growth and provided a platform for delivering AI workloads.

However, the revenue guidance does not provide clarity on margin trajectory, and there remains substantial uncertainty about how depreciation and operating expenses associated with the GPU pool will flow through the profit and loss statement. The company has also signalled that debt will become a more permanent feature of its capital structure, with an upsized debt facility of approximately A$150 million incorporated into funding plans. This evolution toward a more leveraged balance sheet reflects the capital intensity of the new business model.

What Next For Megaport

The near-unanimous institutional take-up of the entitlement offer signals strong backing from Megaport’s largest shareholders, who collectively hold approximately 60% of the register. This level of support is particularly notable given the size of the raise and the dilution involved, suggesting that sophisticated investors view the risk-reward profile as attractive despite the execution uncertainties.

Megaport’s transformation from a network interconnection specialist into a capital-intensive AI infrastructure provider represents one of the more ambitious strategic pivots among mid-cap Australian technology companies. The A$827 million capital raise and nearly A$460 million in secured contracts provide the financial firepower and demand validation needed to execute the plan, while the 99% institutional take-up and sustained share price strength suggest markets are willing to back the vision for now.