Citi upbeat on Australia's NEXTDC after media report OpenAI to anchor co's Sydney data centre
Citi sees a confidence boost in NEXTDC NXT.AX after media reports that Wall Street's AI darling OpenAI has signed a deal with the Australian data centre operator
On Thursday, a media report said that the ChatGPT owner has signed a deal as anchor tenant for NXT's 650 Megawatt data centre in Eastern Creek
Brokerage says the contract size remains undisclosed, but given S7 data centre’s wholesale "build-to-suit" design, expects it to be hefty, likely above 100 MW, and additive to last week’s deal
Sees earnings impact no sooner than FY28, noting the data centre operator has yet to kick off the development approval process, though approvals could be fast-tracked under the new Investment Development Authority
Citi says earnings upside will be capped as S7 is structured as a JV with NXT holding 20%-25%, but calls the deal a strong positive, boosting confidence in its wholesale build and widening its client mix
Stock down 10.8 %YTD as of last close
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