The logo of Australian data center operator NextDC is displayed at its Artarmon facility in Sydney on September 15, 2026. (Photo by Saeed KHAN / AFP via Getty Images)
Saeed Khan | Afp | Getty Images
Shares of Australia’s NextDC plunged 39.5% on Wednesday after the data center company sharply reduced its annual earnings outlook. NextDC blamed delays in securing power for its Melbourne facility, where opposition from local residents and other stakeholders has disrupted planned infrastructure work.
NextDC cut its fiscal 2027 revenue forecast to between 475 million Australian dollars and A$500 million, down from its previous range of A$615 million to A$640 million. The company also reduced its projected underlying earnings before interest, taxes, depreciation and amortization, or EBITDA, to A$245 million to A$265 million, compared with the earlier estimate of A$385 million to A$410 million.
Shares of NEXTDC on 22 Oct.
The power delays follow a suspension of infrastructure upgrades at NextDC’s M3 Melbourne data center amid community resistance. Electricity distributor Jemena does not expect work to restart before February 2027, NextDC said.
Jemena pointed to safety risks, restricted access to work sites because of community opposition and the absence of local council consent while additional community consultation remains pending.
Citi warned that the disruption could weigh on NextDC’s earnings beyond fiscal 2027. In a note, the bank cited delays in approvals for the M3 expansion and a longer-than-anticipated schedule for transformer upgrades.
The setback comes as Australia confronts increasing scrutiny over the effects of data center construction on nearby communities. Treasurer Jim Chalmers said the government is developing national investment standards.
Speaking to CNBC’s “Squawk Box Asia” on Wednesday, Chalmers said Australia supports investment in data centers and artificial intelligence infrastructure when it serves the national interest. He added that the government was finalizing nationwide standards to address concerns related to the deployment of AI.
Australia’s debate reflects a broader global backlash against data center projects. Communities in several countries have raised concerns about the developments’ environmental effects and their impact on local areas.
NextDC’s stock has fallen for seven consecutive weeks and is heading toward an eighth straight weekly decline.
