Megaport shares soar after securing $254m contract from US firms
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More news: Megaport paced gains on the ASX 200 after announcing that its subsidiary Latitude secured three major contracts valued at a combined $254 million.
The company, which also flagged an increase in FY26 group capex on Thursday, saw its shares rise 36.55% to $13.45 at 12:24pm AEST.
UBS analyst Tim Plume holds a “buy” rating with a price target of $14.65, saying that the announcement was a significant win for the business. He expects a potential 45% return from the three year contract, even if the company does not plan to extend.
Plume also said the contracts would “require upgrades” to consensus expectations for group EBITDA. He said that taking all else equal, preliminary analysis suggests a potential 30% upside to UBS expectations for FY27 group EBITDA and 26% to Visible Alpha consensus.
Megaport raises FY26 capital spend guidance to fund Nvidia GPU contracts
The news: Megaport’s wholly subsidiary Latitude has secured three major GPU, CPU, network and storage contracts across two US-based tech providers, valued at a combined total of USD182 million ($254 million).
The context: The contracts require USD101 million in incremental capital expenditure funded by Megaport through a combination of existing cash reserves and debt facilities for the purchase of high-performance Nvidia GPUs, with a payback period of approximately two years.
Megaport reaffirmed its FY26 revenue and earnings guidance, however flagged that the FY26 group capex is projected to increase by a further $140.3 million.
What they said: “We are at a forefront of an accelerating infliction point across the industry. As use cases shift from AI foundations model inference and the edge, Megaport is becoming an essential platform for powering the applications of tomorrow with globally distributed automated infrastructure,” CEO Michael Reid said.
The sources: ASX, UBS analyst note
