Australia's data centre shares have had an arduous journey throughout the past 12 months.
US President Donald Trump announced plans to impose a 100% tariff on semiconductor imports earlier this year, which would have a direct impact on global data centre supply chains.
The news sent data centre share prices tumbling, and it's taken six months to see any type of recovery.
But now it looks like sparks of hope have ignited for the market and its outlook, as Macquarie Group Ltd (ASX: MQG) places an outperform rating on three ASX data centre stocks.
Infratil Ltd (ASX: IFT)
Infratil has majority ownership of CDC Data Centres, a leading Australasian data centre provider, which recently announced that it has secured about 100MW of new contracted capacity. Infratril is dual listed on the ASX and the NZX.
At the time of writing, Infratil shares are 2.56% higher and changing hands for $11.20 a piece. Over the past 12 months, Infratil's shares have climbed 1.08%. On the NZX, the stock is up 2.43% to NZ$12.67.
In a recent note to investors, Macquarie confirmed its outperform rating on the stock and raised its target price to NZ$13.26, up from NZ$12.91 just last week.
That represents a potential 4.7% upside for investors over the next 12 months.
Nextdc Ltd (ASX: NXT)
The broker is also positive on Nextdc shares. Nextdc is a data centre provider that builds and operates a nationwide network of high-quality, certified data centres in Australia and is expanding internationally.
At the time of writing, Nextdc shares are 0.89% higher and trading at $16.94 per share. Over the year, the share price is 3.97% lower.
Macquarie has an outperform rating on the shares, and a target price of $20.90, down from $22.30 in August. Despite the target price cut, this still represents a potential 23.4% upside over the next 12 months.
DigiCo Infrastructure REIT (ASX: DGT)
DigiCo is a data centre REIT and developer operating across Australia and North America.
At the time of writing, DigiCo's share price has jumped 13.92% higher and is trading at $3.11 a piece. Over the year, the share price is 37.8% lower.
Macquarie also has an outperform rating on DigiCo shares, and a target price of $3.90. This represents a potential 25.4% upside for investors.
What does Macquarie have to say about the data centre shares?
Macquarie has a high conviction in the Stargate Global deal and/or government data centre contracted capacity, which is expected to represent around 200-750MW of market demand.
"A clear hurdle in Australia is IP law, which was a key focus of the Interim Report. Ultimately, Australia is the only AUK/US treaty member without direct contracting with OpenAI," the broker said.
Macquarie also notes that Asian Hyperscalers have returned. Industry conversations flag Bytedance and Tencent have returned to the Australian market for leased capacity.
The broker added:
Higher density is driving lower unit capex requirements for larger operators. If industry EBITDA per MW holds at ~A$1.5-2.0m per MW, this can drive return expansion. Industry feedback suggests pricing on front book capacity remains higher than the market initially feared. Over time, we think AI capacity is commodity capacity, but in the near-term and with long-term contracts, returns are looking healthy. At the same time, large contracts are driving strong earnings growth relative to history.
