This ASX tech stock has been one of the standout performers in the market in 2025. The share price of Megaport Ltd (ASX: MP1) has soared this year by 93%.
It's a stark contrast with the performance of ASX 200 tech shares in general. By comparison, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is down 24% from its peak in September.
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Back in the groove
After a few challenging weeks, during which trade in this high-flying ASX tech stock was lower, Megaport has found its groove again. At the time of writing, the shares trade hands for $14.30 apiece, up 3.1%. That brings this week's share gains to 11%.
Several factors explain why the Brisbane-based company is breaking away from the tech pack. Some major brokers continue to recommend buying or holding the ASX 200 tech stock. They highlight Megaport's competitive advantage in automated networking and its growing list of large enterprise customers.
Megaport is a network-as-a-service solutions provider that makes it fast and easy for businesses to connect to the cloud. Instead of building expensive physical networks or signing long-term telecom contracts, companies can use Megaport's software to create private, secure data connections in minutes. It's cheaper, quicker and more flexible than traditional networking.
Expanding global footprint
Megaport's platform allows customers to connect to around 860 data centres worldwide. In the first half of FY25 alone, the tech company added another 82 data centres and four new internet exchange locations.
The ASX 200 stock has continued to scale quickly, too. Its customer numbers are growing rapidly, and it has an expanding global footprint. This has helped Megaport underpin a strong annual recurring revenue (ARR) growth. For example, in FY25, it reported a 20% increase in ARR to $243.8 million.
Can Megaport keep climbing?
Consensus analyst forecasts suggest there's still room for this ASX tech stock to go higher. The average 12-month price target sits around $16 to $17, implying further upside from current trading levels.
Broker Morgans just upgraded its recommendation for the tech share to a buy rating with a $17.00 price target. This implies potential 19% upside for investors over the next 12 months.
The broker released its update to reflect the acquisition of Latitude.sh and its network expansion into the India market. Analysts are pleased with Megaport's performance so far in FY 2026.
Explaining its upgrade, Morgans said:
We update our forecasts to include MP1 recent capital raising, acquisition of "Compute-as-a-Service" provider Latitude.sh and network expansion into India. The acquisitions accelerate revenue and EBITDA growth while the core MP1 business keeps improving. Since June 2025 NRR (net revenue retention) has lifted 2 ppts to 109%. Revenue and ARR (annual recurring revenue) growth is strong. We upgrade to a BUY recommendation and our target price moves to $17.
