NextDC Ltd (ASX: NXT) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) data centre operator and developer closed yesterday trading for $13.90. During the Wednesday lunch hour, shares are changing hands for $13.72 apiece, down 1.3%.
For some context, the ASX 200 is down 0.3% at this same time.
Despite today's dip, NextDC shares remain in a strong uptrend since early April. And Baker Young's Toby Grimm expects the stock can keep outperforming (courtesy of The Bull).
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Should I buy NextDC shares today?
"Australia's largest data centre developer has entered into a binding agreement for a new $2.2 billion debt funding package to accelerate growth," said Grimm, citing the first reason he has a buy rating on NextDC shares.
"The maturity date for the new debt facilities is December 3, 2030," he added.
The second reason Grimm is bullish on the ASX 200 company is its direct exposure to the booming artificial intelligence (AI) industry.
"While the use of debt increases risk, demand for artificial intelligence and data warehousing are structural tailwinds, which appear highly resilient," he said.
"Using debt signals management's confidence in continuing to attract growth, underpinning its international expansion," Grimm noted.
And the third reason to buy NextDC stock today is the rebounding share price trend.
"The company has been enjoying favourable momentum, with the shares increasing from $10.08 on April 9 to trade at $14.17 on July 3," Grimm said.
While shares have dipped to $13.72 today, that still sees the ASX 200 tech stock up 36.7% from the recent 7 April closing low of $10.04.
What's been happening with the ASX 200 data centre developer?
With the $2.2 billion in new debt funding Grimm mentioned above, NextDC reported on 18 June that it now has total available senior debt facilities of $5.1 billion. Which, if deployed wisely, should certainly help NextDC shares expand their global footprint.
The most recent performance update from the company was released on 10 June.
Demonstrating ongoing growth, the company reported a 7% quarter-on-quarter increase in its contracted utilisation to 244MW.
The biggest boost was delivered by its data centre project in Kuala Lumpur, Malaysia (KL1). The contracted utilisation of 10MW now represents 15% of its planned capacity.
"KL1 represents a strategic milestone in NextDC's Asia expansion and reinforces our commitment to delivering sovereign, AI-native digital infrastructure across high-growth regional markets," CEO Craig Scroggie said on the day.
Looking ahead, Scroggie added:
As the next industrial era takes shape in a rapidly evolving geopolitical landscape, AI infrastructure will be defined by five enduring pillars: speed, scale, security, sustainability and sovereignty.
NextDC shares closed up 5.2% on the day the update was released.
