ASX tech stock Megaport Ltd (ASX: MP1) has exploded higher over the past month, leaving many investors wondering whether the rally is only getting started.
The $2 billion share has surged more than 50% in just one month, dramatically outperforming the S&P/ASX All Technology Index (ASX: XTX), which has gained roughly 4% over the same period.
Despite the sharp rebound, Megaport shares are still down around 19% year to date at the time of writing, roughly in line with the broader ASX tech stock benchmark.
So, could Megaport still have room to double from here?
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Powering global data flow
Megaport operates a global network-as-a-service platform that enables businesses to instantly connect to cloud providers, data centres, and internet infrastructure worldwide.
In simple terms, the ASX tech stock helps enterprises move and manage massive amounts of data quickly and securely without needing to build expensive physical infrastructure.
That positioning is becoming increasingly valuable as artificial intelligence, cloud computing, and digital infrastructure demand continue to accelerate globally.
Importantly, Megaport generates recurring revenue through long-term customer contracts, giving investors exposure to scalable software-like earnings growth.
AI demand continues driving growth
One major reason investors remain bullish on this ASX tech stock is its growing exposure to AI-driven infrastructure demand.
Megaport recently announced a major new compute and storage customer contract valued at approximately US$25.1 million, or around $35.4 million, over 36 months. The agreement adds approximately US$8.4 million, or A$11.8 million, in annualised recurring revenue (ARR).
That matters because recurring revenue growth is often a key driver of higher valuations for technology companies.
Management said its subsidiary Latitude.sh is ideally positioned as a critical infrastructure platform to continue capturing "unprecedented AI-driven demand for CPU, GPU and storage". As global businesses invest heavily in artificial intelligence systems and high-performance computing, demand for scalable network infrastructure may continue rising rapidly.
Strong recurring revenue momentum
The ASX tech stock is also continuing to deliver impressive underlying growth metrics.
Megaport's network ARR reached $272 million as at 31 March 2026, representing 23% year-over-year growth on a constant currency basis. Those are strong growth figures in a market where many technology companies are struggling to maintain momentum.
The company's expanding customer base, growing enterprise demand, and increasing exposure to AI infrastructure are helping support investor optimism despite broader volatility across the technology sector.
Risks remain
Of course, risks still exist. Technology shares can remain highly volatile, particularly when valuations become stretched after sharp rallies. Megaport also faces intense competition in cloud infrastructure and connectivity markets.
Profitability and execution will remain key areas investors watch closely.
Still, analyst sentiment currently appears very positive. According to TradingView data, 12 of 15 brokers rate the ASX tech stock as either a buy or strong buy, while the remaining three have hold recommendations.
The average analyst price target currently sits at $15.32, implying roughly 55% upside from current levels. Meanwhile, the most bullish analyst valuation suggests the stock could climb as high as $24. That points to a potential upside of around 142%.
