Nextdc Ltd (ASX: NXT) shares are starting the week on a positive note.
In morning trade, the data centre operator's shares are up 9% to $13.05.
Image source: Getty Images
Why is this ASX AI stock rising?
Investors have been bidding the ASX AI stock higher today after it released another update on its data centres.
As a reminder, on 1 December, NextDC revealed that a series of customer contract wins had taken its pro forma contracted utilisation to 316MW. This was an increase of 71MW or 29% since 30 June.
The good news for shareholders is that over the past three weeks, the company has won even more customer contracts, which has underpinned another sharp increase in contracted utilisation.
According to the release, the company's pro forma contracted utilisation has increased by 96MW or 30% to 412MW since its last update on 1 December.
As a result of these customer contract wins, the ASX AI stock's pro-forma forward order book has increased to 301MW.
Management advised that its pro-forma forward order book is expected to progressively convert to billings, revenue, and EBITDA over the period FY 2026 to FY 2029.
For now, its net revenue, underlying EBITDA, and capex guidance remains unchanged for FY 2026.
Should you invest?
While brokers have not had chance to respond to this update just yet, they were overwhelmingly bullish on this ASX AI stock.
For example, Ord Minnett recently put a buy rating and $20.50 price target on its shares. It said:
Ord Minnett notes NextDC had only guided to 50–100MW of contract wins for FY26, so the latest announcement, along with industry feedback highlighting strong demand from both western and eastern hyperscalers, bodes well for the full-year outcome. […] We have raised our target price on NextDC to $20.50 from $19.00 to incorporate our assumed value of the agreement with Open AI, although we have not yet changed our earnings estimates due to the lack of detail and operational timelines. We reiterate our Buy recommendation.
Over at Morgans, its analysts are equally bullish. They have a buy rating and $19.00 price target on NextDC's shares. Earlier this month, the broker said:
NXT has announced that following recent customer contract wins, presumably including a large single customer contract win across multiple locations, its contracted utilisation has increased by 71MW to 316MW as at 1 December 2025. Further contract wins were, and remain in, our forecasts so this mostly underpins our expectations. However, we upgrade our capex assumptions and lift our FY27/28 EBITDA forecasts by 5%. Our target price remains $19 per share. The share price has declined ~19% in the last three months and given a ~40% differential between the current share price and our $19 target price we upgrade our recommendation to BUY from ACCUMULATE.
