Artificial intelligence (AI) has been one of the most powerful investment themes of the past decade, and its influence is only accelerating.
Yet even the strongest AI-linked businesses are not immune to market pullbacks.
One ASX stock that fits this description is NextDC Ltd (ASX: NXT).
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A high-quality AI enabler at a discounted price
NextDC is not a flashy software or chip company, but it plays a critical role in the AI ecosystem. The company owns and operates a growing network of premium data centres across Australia and the Asia-Pacific.
From these centres, it provides the infrastructure that powers cloud computing, artificial intelligence, and hyperscale workloads.
Every major AI trend, from large language models to enterprise automation, relies on enormous amounts of data storage, processing power, and connectivity. That demand ultimately flows through to data centre operators like NextDC, which supply the physical backbone of the digital economy.
Despite this strong long-term positioning, this artificial intelligence ASX stock is currently trading at $12.70, which is roughly 30% below its 52-week high.
This pullback appears to reflect broader concerns about AI valuations and higher interest rates, rather than any fundamental deterioration in the company's role within the industry.
Long-term growth story
NextDC continues to invest heavily in expanding capacity to meet future demand. This includes its recent agreement with ChatGPT's owner, OpenAI, to look at building the largest data centre in the southern hemisphere.
This leaves it well-positioned to benefit from increasing demand for capacity in data centres from hyperscale customers, global cloud providers, and enterprise clients that require secure, high-performance infrastructure.
In fact, the artificial intelligence ASX stock has released two trading updates this month which revealed that demand has been growing rapidly. Last week, it noted that its pro forma contracted utilisation increased by 96MW or 30% to 412MW since its last update on 1 December.
The good news is that this is unlikely to be where it stops. AI workloads are far more power and data-intensive than traditional computing. That structural shift supports sustained demand growth for next-generation data centres, particularly those located in strategically important markets like Australia.
Should you invest in this artificial intelligence ASX stock?
Morgans sees significant value on offer at current levels.
Earlier this month, the broker upgraded NextDC's shares to a buy rating with a $19.00 price target. This implies potential upside of almost 50% for investors over the next 12 months. It 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.
Overall, this could make it worth considering NextDC shares if you are looking for exposure to the AI boom.
