Markets
NextDC Fell 40% to Its Lowest Since 2018 After a Power Delay at One Melbourne Site Cut Its FY27 Revenue Guidance by A$140 Million
Shares of NextDC, Australia's largest listed data-centre developer, fell as much as 44% on October 21 and closed near A$5.50, their lowest since January 2018, after the company cut its fiscal 2027 revenue guidance to A$475 to A$500 million from A$615 to A$640 million and underlying EBITDA to A$245 to A$265 million from A$385 to A$410 million. The cause is a suspended power upgrade at its M3 site in Melbourne, where the distributor Jemena cited safety concerns, restricted site access and a missing council consent. About A$3.1 billion of market value was lost in a session in which the ASX 200 was flat.
The AI data-centre trade found its Australian example on Wednesday. NextDC, which builds and leases the halls that cloud and AI companies fill with servers, said before the open on October 21 that it had suspended infrastructure upgrades at M3, its Melbourne campus, because the electricity distributor Jemena had raised safety concerns, restricted access to the work sites and had not received the local council's consent. The power the site needs will arrive later than planned, and with it roughly A$140 million of revenue moves from fiscal 2027 into fiscal 2028: guidance for the year to June 2027 is now A$475 to A$500 million of revenue, down from A$615 to A$640 million, and underlying EBITDA of A$245 to A$265 million, down from A$385 to A$410 million.
The shares had closed at A$9.18 on Tuesday, having been halted around the announcement. They opened on Wednesday more than 40% lower, traded as low as A$5.07, a 44% fall, and were around A$5.47 to A$5.62 by the close, according to different reports, their lowest level since January 2018. CNBC put the decline at 39.5%; about A$3.1 billion of market value was gone, and the stock was the worst performer in an S&P/ASX 200 that ended the day roughly unchanged. Citi analysts warned that the earnings effect could extend beyond 2027 if the Melbourne dispute drags.
The company has not lost a customer and has not changed its view of demand. What it has shown is the part of the data-centre business that the AI narrative tends to skip: a hall is only a revenue line once the grid connects it, and grid connections in Melbourne, as in Northern Virginia and Frankfurt, depend on distributors, councils and neighbours who did not sign the lease. A 40% move on a timing problem says how much of the share price was the schedule.
It is the fourth such episode in a week. CoreWeave lost a quarter of its value in the United States on worries about the debt behind its capacity, Australia's Firmus shelved a $5 billion IPO, Korea's Elice Group fell 32% below its offer price on its first day, and now NextDC has fallen 40% on a late transformer. On the same day, SpaceX reported $7.56 billion of quarterly revenue from leasing compute to Anthropic, Google and others, and Super Micro raised its quarterly revenue outlook by $4 billion. Demand for the equipment is not the question. Whether the people building the halls, and the people lending to them, get paid on the schedule they promised is.