Global Markets
NextDC shares slump more than 40% as a stalled Melbourne power upgrade forces a deep FY27 guidance cut
The Australian data-centre operator removed about A$140 million of revenue and EBITDA from its forecasts and froze new development after grid works at its M3 campus were suspended.
HedgeWeekly News Desk ·
Shares in NextDC fell more than 40% on Wednesday after the Australian data-centre operator resumed trading from a halt and slashed its guidance for the year to June 2027. Investing.com put the drop at 42.7%, to A$5.26, in early Sydney trade, while the broader ASX 200 was little changed.
The company now expects FY27 net revenue of A$475 million to A$500 million, down from A$615 million to A$640 million, and underlying EBITDA of A$245 million to A$265 million, down from A$385 million to A$410 million. It said roughly A$140 million of each measure tied to affected customer contracts at its 225-megawatt M3 campus in Melbourne has been stripped out because their timing is now uncertain. Capital expenditure guidance was trimmed to A$4.5 billion to A$5.0 billion from A$5.25 billion to A$5.75 billion.
The cut follows a decision by electricity distributor Jemena to suspend parts of its high-voltage grid augmentation works for M3, which NextDC linked to community and local council opposition. Jemena does not expect to restart before February 2027, pushing the next power increase into FY28, and a planning decision on later stages of the site is not expected until after Victoria's 28 November state election. NextDC has put all new development projects and land acquisitions on hold, will review capital spending and may sell selected development sites.
Why it matters: the downgrade shows grid access, not just chip supply or tenant demand, can be the binding constraint on AI infrastructure growth, and that local opposition can delay contracted revenue. NextDC was among the ASX's more shorted names, with 8.52% short interest as of 14 October according to Market Index, and the stock had already fallen about 40% in the month before the announcement. Investors will watch the board's capital review, any site sales, the November election outcome and whether contracted M3 customers stay put; the company reported about A$8.7 billion of liquidity at 30 September and said it remains within its covenants.