The Nextdc Ltd (ASX: NXT) share price is 22% lower over the year after it suffered a price plunge in April. But it has since posted a strong and consistent recovery.
At the close of the ASX on Wednesday, the share price finished at $14.08.
The share price has also performed well over the longer term. Over the past five years, Nextdc shares have climbed 31%; over the past ten years, they've risen around 440%.
What does Nextdc do?
Nextdc is Australia's leading independent data centre operator. It is focused on providing a secure environment for businesses to house their IT infrastructure and enabling them to have reliable network connections to support their operations.
The business is headquartered in Brisbane. It operates across 13 data centres, supporting networks across Sydney, Melbourne, Brisbane, Perth, and Canberra.
The company is different from its peers because it is a network-rich connectivity ecosystem that links over 750 IT service providers, cloud platforms, and network partners.
And thanks to an explosion of demand for cloud computing, AI adoption, and general digital infrastructure needs, the company has significant growth prospects.
Nextdc has raised $1.3 billion to develop new data centres in Sydney and Melbourne to meet the increasing demand for AI processing power, positioning itself well to absorb market demand as it ramps up.
Analysts are optimistic about the stock's outlook, expecting more upside over the next 12 months. And it's in favour with investors too. Nextdc was the second-most traded AI stock on the ASX from 1 April to 15 June.
Nextdc primed for strong growth
Data shows analyst consensus for a strong buy rating on the stock. Out of 17 analysts, 12 recommend a strong buy, four recommend a buy, and one has a hold position.
One-year forecasts on the company's share price are positive too. Of the 17 analysts, the average 12-month forecast is $19.38, and the maximum is $28.36. That represents a huge 38% to 101% upside from Wednesday's close.
Morgans is very bullish on NextDC and sees it as a great way to invest in AI. It has a buy rating and a $18.80 price target on its shares. This would represent a 34% increase from Wednesday's share price at the ASX close.
But Macquarie thinks the share price could storm even higher. The broker recently confirmed its outperform rating and its $22.10 target price on the stock. That represents a potential 57% upside from Wednesday's trading price at ASX close.
That means that, in 12 months, Nextdc shares could turn $10,000 into as much as $20,142, according to analysts' maximum estimates.
