NEXTDC Melbourne Setback and Record Contracts, October 2026
NEXTDC has signed record data-centre contracts but its shares have fallen sharply after community opposition over power infrastructure stalled its Melbourne expansion and management issued a profit warning; October reports cited declines of roughly 40–42% in market value. Shares currently trade at A$5.87, against a session close of A$14.06 in July.
NEXTDC (ASX:NXT), one of Australia's largest data-centre operators, finds itself at an unusual juncture heading into the close of 2026. Kalkine has reported that the company has signed record data-centre contracts, with the investment community now focused on the pace at which that backlog converts into recognized revenue. At the same time, shares last traded at A$5.87, a substantial distance from the A$14.06 close recorded in the July 21, 2026 trading session, after a sequence of developments in October that has materially reset near-term expectations.
The most significant of those developments, according to reports published by SMBtech and Fortune in October 2026, was community backlash over overhead power-pole infrastructure tied to the company's Melbourne data-centre plans, which both reports said caused those plans to be derailed. SMBtech reported that shares fell approximately 40%; Fortune put the market-value loss at approximately 42%. In parallel, Mingtiandi reported that chief executive Craig Scroggie voluntarily forfeited his 2027 bonus entitlements as the sell-off, which followed a profit warning, continued to deepen. The specific financial components underlying that profit warning have not been disclosed in coverage available to Slicast.
Those October events arrived at the end of an extended capital-deployment push. In June 2026, NEXTDC acquired a 169-hectare site at Lovely Banks near Geelong in Victoria, intended for a large-scale AI-ready data-centre campus, though reports at the time noted the purchase drew community concern about its proximity to approximately 2,000 planned homes. In July 2026, the company secured an additional A$500 million in senior debt facilities, lifting total committed financing to A$2.3 billion earmarked to fund contract-utilization growth. On the July 21, 2026 trading session, shares closed 7.7% higher at A$14.06. Reports in August indicated NEXTDC had assembled approximately A$3.8 billion in total funding to support AI-driven capacity expansion. In September, Reuters and other outlets reported a further raise of approximately $795 million directed at AI infrastructure across the region, alongside a debt arrangement that Kalkine described as funding aggressive expansion in Australia and New Zealand.
The divergence between contract momentum and share-price trajectory highlights the central challenge of large-scale data-centre development: revenue recognition depends not on contracts signed but on megawatts energized, which requires permits, grid connections, and — as NEXTDC's recent experience illustrates — community acceptance of the physical infrastructure required to deliver power at scale. The Melbourne situation, in which overhead power-pole infrastructure became the point of contention, demonstrates that grid connection is a negotiation with multiple stakeholders, not a technical formality. The Lovely Banks acquisition, completed amid existing community concerns in June 2026, represents a long-dated option whose development schedule remains unclear. Both cases reflect a planning and permitting risk that runs alongside, and can materially offset, the demand signal embedded in record contract signings.
Looking ahead, three signals merit close attention. First, the resolution of the Melbourne infrastructure dispute: whether the power-pole opposition leads to a permanent redesign or a negotiated path forward will directly affect near-term capacity delivery. Second, the pace at which existing contracted capacity is recognized as revenue in forthcoming half-year results — Kalkine's characterization of this as the market's primary question is well-placed, and tangible progress would provide the clearest counter-narrative to the current share-price overhang. Third, balance-sheet sustainability: A$2.3 billion in committed debt is a significant load, and shares at A$5.87 remain far below mid-year levels. A durable re-rating will likely require visible delivery milestones alongside greater clarity on the planning risks that, for now, remain the dominant uncertainty.