Midsize Data Centre Firms Like NextDC Will Be Attractive to Acquirers If the Market Sells Them Off

With NextDC’s stock briefly touching 4-star territory recently based on our AUD 11 fair value estimate, we think it should be on investors’ radar should a further pullback occur. The broader environment for data centres and the consolidation of many smaller competitors—similar to NextDC—lead us to bring our uncertainty rating down to medium, and we believe the stock has a floor under which its stock price is unlikely to persist.