Artificial intelligence (AI) is reshaping the world and Australian investors are searching for stocks that stand to benefit from this generational shift.
On the ASX, one company in particular looks well positioned to ride the AI wave: NextDC Ltd (ASX: NXT).
The Australian stock powering the AI revolution
AI models are hungry for computing power. Behind every chatbot, image generator, or analytics engine are vast data centres filled with servers that process staggering amounts of information. That's where NextDC comes in.
This Australian stock builds and operates state-of-the-art data centres across the nation and, increasingly, the Asia-Pacific region. These facilities provide the critical infrastructure that cloud providers, enterprises, and technology companies need to run their applications — including AI.
Strong growth trajectory
NextDC recently reported record contracted sales, with demand driven in part by cloud and AI adoption. Its forward order book has reached new highs, and the company is investing heavily to expand capacity to meet demand.
In FY 2025, the Australian stock's revenue grew 14% to $350.2 million, ahead of guidance, while underlying EBITDA rose 6% to $216.7 million. Perhaps most telling, NextDC secured its first 10MW hyperscale order at its Kuala Lumpur facility — evidence that global-scale AI demand is spreading into the Asia-Pacific.
And with pro forma liquidity of $5.5 billion, the stock is well funded to accelerate new builds and bring capacity online as quickly as possible.
A structural growth story
While short-term earnings can fluctuate due to heavy investment, the long-term trend for NextDC is up. Demand for data storage and processing is not cyclical in the traditional sense — it is structural.
As AI adoption accelerates, the need for scalable, high-performance data centres will only intensify.
Analysts at Morgans expect this to be the case and are bullish on the Australian stock. They recently said:
NXT's FY25 result in line with expectations as was FY26, but FY27 was higher. Highlights of the result include: 1) a slide which finally shows investors the revenue ramp-up profile of NXT's contracted MWs (it's faster than anticipated so upgrades forecasts); 2) the pipeline is larger than ever (~2 GWs in NSW alone); and 3) setting up a partnership in Japan and Joint Ventures for S4/S7 will lower NXT's equity requirements (relative to 100% self-funding). While none of these items are totally new, collectively they represent good reasons for the share price to rally strongly. We lift FY26F EBITDA by 2% and FY27 by 23%.
Morgans has a buy rating and $19.00 price target on NextDC's shares.
Foolish takeaway
AI is one of the biggest technological shifts of our time, and infrastructure players like NextDC are quietly at the centre of it. With record contracted sales, a strong pipeline, and a well-capitalised balance sheet, the stock looks well placed to keep benefiting from the boom in cloud and AI workloads.
