ASX AI stocks have caught a strong bid in 2024. The artificial intelligence domain has seen tremendous growth, spurred on by the meteoric rise of US tech giants like Nvidia Corp (NASDAQ: NVDA).
One Australian tech company is also capturing investor attention thanks to its links to AI, with its share price surging more than 87% in the last month.
SKS Technologies Group Ltd (ASX: SKS) is in the news today with two market-sensitive announcements.
SKS provides audiovisual products alongside electrical and communications cabling to various industries. At the time of writing, the ASX AI stock is up 17.9% on Friday and is fetching $1.35 apiece.
Here's a look at the company's latest updates.
ASX AI share secures $90 million contract
SKS Technologies announced today it has landed a $90 million contract as part of an international hyperscale data centre being refurbished in Melbourne.
The West Melbourne project will expand the current facility's capacity to 185MW, making it "one of the largest data centres in Australia offering both cloud and AI services to a growing base of customers", according to the company.
These works form part of the 100MW expansion of the data centre in Melbourne's western region, which will take the facility to a total capacity of 185MW upon completion and will be one of the largest data centres in Australia offering both cloud and AI services to a growing base of customers.
As such, this project award takes SKS Technologies' work on hand to another record high of $178 million, which is considerable given the rate at which work is being completed and converted to revenue.
The ASX AI stock advised it would handle the "electrical design and construction works" of the project's current stage.
This involves electrical infrastructure, installing transformers, generators, powertrain units, and comprehensive electrical design
SKS Technologies CEO Matthew Jinks said the contract reflected the market's confidence in the company's ability "to deliver superior electrical systems".
It is also indicative of the strength of the pipeline of opportunities in the data centre sector,
which saw $18 billion of projects announced for hyperscale data centres in Melbourne and
Sydney in 2023 alone.
Jinks went on to say:
Furthermore, based on past initiatives to apply our expertise and experience to the datacentre market and capture a share of this rapidly growing opportunity, SKS Technologies is now able to execute sophisticated, large-scale projects for the organisations at the forefront of this new and growing frontier.
Updates to FY4 and FY25 revenue forecasts
In a separate announcement today, the ASX AI stock updated its FY25 outlook. Management now forecasts generating more than $200 million in revenue for this financial year. ]
This is based on its current workload of $178 million, which includes the new data centre project mentioned above.
"It's pleasing to see the continued growth of the business, which reflects the market's confidence in SKS Technologies' ability to scale resources and deliver projects," Jinks said.
Today's announcements follow another from SKS Technologies on Monday this week when management announced it expected $130 million in FY24 revenues for the ASX AI stock. This is up from the previous $120 million forecast.
The revision was based on "the continually accelerating level of work on hand" alongside its recent contract wins and "the general health of the business and its ability to fund a substantial level of further growth with its recently increased bank facilities"
Moreover, the company says the pipeline of opportunities for new work shows no sign of abating.
