NextDC shares (ASX: NXT) have fallen 3.42% today to test A$11.00, extending what has been a punishing run for holders, down 25.7% over the past month of trading.
With momentum stalling out despite the company posting the biggest result in its history, the question turns to why?
The selling appears to reflect a continued repricing of long-duration growth, as the company spends heavily today for earnings that arrive years into the future, making valuation more sensitive to bond yields than others. With Australian yields at their highest levels since the early 2010s and markets positioning for further policy tightening, the discount rate applied to those future cash flows keeps rising, and the share price keeps adjusting lower. All this selling against the backdrop of improving fundamentals, with the macro taking the fore.
Financials Look Strong, Yet Capex Rising
Looking at recent financials, and the NXT story has rarely looked stronger, with FY26 revenue rising 16% to A$496.5 million, underlying EBITDA climbed 15% to A$248.8 million, and the company swung to an A$82.1 million net profit from a A$60.5 million loss. Contracted utilisation surged 202% to 740.1 megawatts, and the forward order book of 565 megawatts is more than three times current billing capacity.
Management’s FY27 guidance of A$615 million to A$640 million in net revenue and A$385 million to A$410 million in EBITDA implies growth above 50%. The sticking point is what it costs to get there.
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Capex hit a record A$3.4 billion in FY26 and is guided to A$5.25 billion to A$5.75 billion in FY27, and the company has tapped investors repeatedly with a A$1.5 billion equity raising, A$750 million of subordinated notes, a A$1.1 billion convertible note issue that marked its third capital raising in just over four months, and A$2.3 billion in new senior debt facilities.
What Comes Next?
Looking to the analyst community, and the average price target of A$20.03 remains firmly bullish. That consensus target for the next 12 months points a potential 81% upside from where the stock trades today, with UBS carrying a target above A$23. In this week’s share tips, James Bills of Shaw & Partners also gave the stock a Buy rating, pointing to strong demand for data centre infrastructure, driven by cloud computing, artificial intelligence and increasing digitalisation across the economy.
The technical picture is pointing to the downside, with NextDC’s share price trading below both the 50-day average at A$13.47 and the 200-day at A$13.63, with the shorter average below the longer one. Today’s slide has pushed the price below the lower Bollinger band at A$11.25, with the bands wide at 25.3% and 20-day volatility rising, pointing to a volatility-accentuated leg lower.
The RSI at 29.2 sits in oversold territory, and the CCI at minus 155.8 confirms the downside stretch which can be seen clearly on the chart.
There has yet to be a close below A$11 this side of 2026, but there remains every chance this week. For bulls to shift momentum, markets will likely want evidence that contracted megawatts are converting into billed revenue on schedule, that the FY27 capex program is landing on time and on budget, and that the funding already lined up proves sufficient. A plateau in bond yields would also be a great help, given how much of the selling traces to discount rates.
