NextDC Ltd (ASX: NXT) shares have fallen 14% over the past month, a strange result for a company that just tripled its contracted capacity.
The stock closed Tuesday at $12.52, down 23.28% over twelve months.
Goodman Group (ASX: GMG) has done no better, falling 19.03% over the same period.
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Why NextDC shares have fallen while demand has not
Westpac moved its cash rate forecast to a November rise this week. One reason cited was the scale of investment in data centres and the renewable electricity they need.
That is an unusual situation.
The boom is now considered inflationary enough to justify tighter policy, yet the two ASX shares most exposed to it have been sold down hard.
That is because building data centres consumes enormous amounts of money before it produces any, and higher rates raise the cost of that money.
What NEXTDC actually reported
The FY26 result was the biggest in the company's history.
Total revenue rose 16% to $496.5 million and net revenue rose 16% to $405.0 million, above guidance.
Underlying EBITDA lifted 15% to $248.8 million, also above guidance.
Statutory net profit swung to a positive $82.1 million from a $60.5 million loss.
The forward-looking numbers are the striking part.
Contracted utilisation surged 202% to 740.1 megawatts.
The forward order book stands at 565.1 megawatts, more than three times current billing utilisation.
Capital expenditure hit a record $3,397 million and pro forma liquidity rose 58% to $8.7 billion.
Chief executive Craig Scroggie set out what happens next.
FY26 was the largest contracting year in NEXTDC's history. Contracted utilisation tripled to 740.1MW on a pro forma basis, and we exceeded guidance on both net revenue and Underlying EBITDA. Our Forward Order Book of 565MW is now more than 3.2 times our billing utilisation, and our focus is on delivering that capacity and converting it into revenue and cash inflow.
FY27 guidance calls for net revenue of $615 million to $640 million and underlying EBITDA of $385 million to $410 million.
That is growth above 50%.
But it also requires capital expenditure of $5.25 billion to $5.75 billion, which is the number that unsettles people.
Goodman is telling the same story
Goodman Group reported FY26 operating profit up 15.7% to $2.67 billion and operating earnings per security up 10.1% to 129.9 cents.
Work in progress reached $19.7 billion, and data centres now make up 78% of it.
Gearing is at just 6.5% with $6.4 billion of liquidity.
Group chief executive Greg Goodman described a market still short of supply.
Demand is structural across both logistics and data centres. Automation and robotics continue to drive logistics requirements while scarcity of power and land remains the key constraint on AI and cloud growth supporting data centre demand. Hyperscaler capex expectations continue to rise, with many customers facing undersupply into 2027 and 2028.
Goodman is targeting 9% operating earnings per security growth in FY27.
What I'd do with NextDC shares now
UBS has a buy rating on NextDC with a $23.45 target, implying 88% upside.
That is enormous upside, but it depends entirely on the company converting contracted megawatts into billed revenue on schedule.
The bear case is straightforward.
NextDC pays no dividend, trades on a price-to-earnings ratio above 100, and needs to spend more than $5 billion next year.
Goodman is the lower-risk way to own the same theme, with real earnings, a distribution and almost no debt.
Foolish takeaway
The AI data centre boom is not over, and the contracted numbers make that difficult to argue.
What has changed is the price investors will pay for growth funded by borrowed money.
I would own Goodman for the theme and NextDC only with a long investment horizon.
