Megaport Ltd (ASX: MP1) shares had a standout FY 2026.
Over the 12 months to 30 June, the growing tech share rose almost 50%, while the benchmark ASX 200 index gained around 3%.
Let's find out why the network services provider's shares smashed the market.
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The Latitude.sh acquisition changed the narrative
Megaport was already known for its network-as-a-service technology, helping businesses connect to cloud providers, data centres, and digital services.
But its acquisition of Latitude.sh pushed the company into a broader market.
Latitude.sh is a compute-as-a-service platform offering high-performance CPU and GPU infrastructure. That gave Megaport a new way to serve customers needing not only connectivity, but also the computing power sitting behind artificial intelligence (AI), cloud-native applications, and data-heavy workloads.
That shifted the market's view of the company. Megaport was no longer just selling flexible digital connections. It was moving toward a platform combining compute, network, and storage.
In an AI boom, that suddenly looked much more interesting.
Contract wins backed up the strategy
The share price strength was also supported by major contract wins after the Latitude.sh deal.
In April, Megaport announced that Latitude.sh had secured a 36-month compute and storage contract worth approximately A$35.4 million. The company also said Compute annualised recurring revenue (ARR), excluding that contract, had lifted strongly since the acquisition.
The momentum then accelerated in May. Megaport announced three major GPU, CPU, network, and storage contracts across two US-based technology customers running AI applications and inference workloads. Those contracts had a combined total contract value of approximately A$254 million and were expected to add about A$90.6 million in ARR once fully deployed.
That was a major validation point. Investors could see the Latitude.sh acquisition turning into real contracted demand, not just a strategic idea.
AI infrastructure became the bigger opportunity
The excitement increased again in June, when Megaport announced four new major contracts with total contract value of approximately A$458.9 million and ARR of about A$199 million.
These contracts were linked to US-based technology providers running AI applications and inference workloads.
Megaport also announced plans for a globally distributed AI inference cloud, including an on-demand GPU pool. That pointed to a much bigger ambition: giving customers access to compute power closer to users, data, and cloud platforms.
The company backed this with an $827.3 million entitlement offer to fund new compute, network, storage, and GPU capacity.
Capital raisings can sometimes weigh on share prices. But in this case, investors had large contracts and strong AI demand to assess alongside the dilution.
A breakout year
Megaport shares smashed the ASX 200 in FY 2026 because its growth story became larger and more tangible.
The Latitude.sh acquisition gave the company compute exposure, while the contract wins showed real demand from AI-related customers.
It is worth remembering that Megaport still has to deploy capital well, deliver hardware, manage customer concentration, and prove that these contracts convert into attractive returns.
But FY 2026 clearly was the year Megaport moved from cloud connectivity story to AI infrastructure contender, and the share price unsurprisingly followed.
