Megaport Ltd (ASX: MP1) shares closed up 9% on Tuesday afternoon at $20.63.
The uptick follows a strong share price rally for the ASX tech shares over the past six months. After slumping to a multi-year low in mid-April, the shares have rebounded strongly. The share price started trending higher in mid-April before quickly picking up pace in mid-May.
Megaport shares have now climbed 204% higher since late-March, and they're also up 73% for the year-to-date.
Image source: Getty Images
What has driven the rebound in Megaport shares?
Megaport shares rebounded strongly in May thanks to a run of good-news announcements and a sharp improvement in investor sentiment.
The software-defined network (SDN) service provider has confirmed several new contracts since late-April, including a three-year compute and storage contract with a total contract value (TCV) of approximately US$25.1 million (A$35.4 million), and three additional binding contracts with two US AI customers, worth a TCV of approximately US$183 million and annualised recurring revenue (ARR) of approximately US$65 million.
In early June, Megaport went into a trading halt ahead of the launch of a new fully underwritten $827.3 million entitlement offer. The company completed the institutional component of the offer, priced at $14.30 per share, on the 5th of June.
In August, Megaport also posted a huge 37% increase in revenue, a 24% increase in EBITDA, and a 62% hike in group annual recurring revenue for FY26. The results came in at the high end of guidance.
Why are the shares flying higher again this week?
The rebound has picked up pace this week after the company announced that it has locked in almost $1 billion of news AI deals.
Ahead of the market open on Tuesday, Megaport posted a note to the ASX confirming it has signed three new AI infrastructure contracts through Megaport's Latitude.sh business. Two are with new customers, and one is with an existing customer.
The deals are worth roughly $978.6 million in total. Megaport will receive around $322.6 million in prepayments, with roughly $281.5 million coming from one new customer before services are delivered.
Megaport said that once everything is up and running, it expects its pro forma ARR to reach around $1.1 billion.
After a difficult start to 2026, it's been tailwind after tailwind for Megaport shares over the past few months.
So are the shares now trading around fair value, or is there more upside left?
Here's what the experts think.
Megaport shares: Buy, sell or hold?
After today's impressive update, I expect some experts could revise or upgrade their expectations for Megaport shares in the coming days.
But at the time of writing, brokers are very bullish about where the shares could travel to next.
Market Index data show that all brokers agree on a strong buy rating for Megaport shares. The $24.66 average target price implies a potential 22% upside, at the time of writing.
According to TradingView data, the majority of analysts (15 out of 16) also have a buy/strong buy rating on the shares.
The average $26.26 target price implies a potential 29% upside at the time of writing. However, some are even more bullish and project the shares to rise by up to 65% to $33.52 over the next 12 months.
