NextDC shares rise 3% on Monday after M3 power delay drove eight-year low

Shares in NextDC rose 20 cents, or 3.41 per cent, to A$6.07 in afternoon trading on Monday 2 November 2026, extending a recovery from an eight-year low, according to a report carried by QOSHE from International Business Times. The stock traded between A$5.68 and A$6.08, nearly 6 million shares changed hands, and the company is valued at about A$4.6 billion. The report said technology stocks were broadly weaker in Australia after a sell-off in AI-related shares on Wall Street, and that the reason for NextDC's gain was not immediately clear.

The shares slumped after NextDC announced on 21 October that a power delay at its M3 data centre in Melbourne would reduce its FY27 outlook. Cls.cn reported the stock dropped as much as 44 per cent during that session and closed at A$5.35, while Motley Fool Australia put the low at A$5.07. Motley Fool Australia said the price was A$6.18 on 30 October, still 60.5 per cent lower than a year earlier.

The cause lies outside the data centre. EnergyNews.biz reported that the distributor Jemena suspended parts of its 66 kV line augmentation works in September 2026, citing community and stakeholder opposition and the local council withholding consent pending consultation. Jemena does not expect to restart before February 2027, and the next increase in grid supply at M3 is now expected in FY28. Later power increases depend on transformer projects at the Brooklyn Terminal Station, the first of which is running late, and the Victorian planning decision on Stages 6 and 7 is not expected until 2027, after the state election on 28 November 2026.

Revised FY27 net revenue guidance is $475 million to $500 million, down from $615 million to $640 million, and underlying EBITDA guidance is now $245 million to $265 million, compared with $385 million to $410 million before. Both revised ranges leave out the affected M3 contracts, which the company put at about A$140 million each in its August guidance. Capital expenditure guidance fell to A$4,500 million to A$5,000 million from A$5,250 million to A$5,750 million, and the company paused new development projects, land acquisitions and projects without customer contracts behind them. Cls.cn reported the company is also weighing capital recycling, including selling some development land.

NextDC followed with a release on 28 October confirming it was complying with its debt covenants. EnergyNews.biz reported total liquidity of A$8,675 million, comprising cash, undrawn senior facilities and a hybrid delayed draw. UBS kept its buy rating and $18.50 price target in a note on 29 October, saying the company has the funds and debt capacity for the M3 contracts, the power works and a good part of future wins. UBS described the situation as a "small wobble in the longer-term structural story of cloud/AI". Other brokers differ: RBC Capital Markets has a $22 price target, while Morgan Stanley's is $6.70. Cls.cn reported Citi said the approval delay and transformer timing could carry the earnings impact beyond FY27.