On October 19, 2026, Australian time, NEXTDC (ASX: NXT), listed on the Australian stock market, asked the Australian Securities Exchange to halt trading because it had an important announcement to make. So trading had been suspended since October 19.
✦ Order of the Halt and Disclosure
Australian dates, October 2026
Then two days later, on October 21, 2026, NEXTDC released an announcement titled 'M3 Melbourne Power Delay and Revised FY27 Guidance.' The key contents are a delay in power supply to the Melbourne M3 data center and a downward revision of earnings guidance.
When trading resumed, the stock closed that day at A$5.35. That's a 41.72% plunge from A$9.18, the close on Friday, October 16, the last day with trading. That day, Australia's S&P/ASX 200 index actually rose 0.16%.
NEXTDC investors probably felt like they alone were on a plunging roller coaster.
Without Power, Servers Can't Make Money
The place at issue is the M3 data center in Footscray, west of Melbourne. The IT capacity NEXTDC lists for this facility is up to 225MW. This number means the IT power capacity the facility can provide by design.
For a data center company to make money, having buildings and servers isn't enough. You have to supply the facility with large-scale power reliably, and that isn't an easy problem.
✦ How the M3 Power Supply Fell Behind
From the Jemena work halt to FY2028
The party in charge of the work needed to supply M3 with more electricity is the grid operator Jemena.
In September 2026, Jemena halted part of the work expanding utility poles and the grid across several areas of northwest Melbourne in order to hear more from residents.
According to NEXTDC's disclosure, there were safety issues over site access and opposition from residents and stakeholders, and the local council also didn't consent to the related road works while further consultation was under way.
In the area, not only power equipment installed close to homes but also construction noise and the data center's diesel generators became points of debate.
Jemena told NEXTDC it would be hard to restart the halted work before February 2027. As a result, the first step of supplying additional power to M3 is expected to be pushed to FY2028 (July 2027 to June 2028).
In other words, it isn't because GPUs or servers are lacking, but because grid work and community consultation have run late, making it hard to supply the capacity already contracted on schedule.
Revenue Guidance Down 22%, Profit Guidance Down 36%
NEXTDC revised down its fiscal 2027 guidance (July 1, 2026 to June 30, 2027). It's the result of removing from the previous guidance the revenue and profit contribution of the M3 customer contracts affected by this situation.
The midpoint of revenue guidance fell by A$140m, from A$627.5m to A$487.5m. The midpoint of underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) fell from A$397.5m to A$255m.
✦ FY2027 Guidance Changes
Fiscal 2027, old guidance → revised guidance
When it issued guidance in August, the company explained that it had reflected about A$140m of net revenue and about A$140m of underlying EBITDA from those M3 contracts.
The contracted capacity hasn't been terminated now, but with the power supply schedule disrupted, it has to go through adjustment procedures with customers.
Depending on the length of the delay and the contract terms, compensation may arise, and in certain circumstances customers also have the right to terminate the contract. In such an uncertain situation, it's understandable that investors dumped the stock.
Halting New Development and Looking After Contracted Customers First
NEXTDC said it would put new development projects and land purchases on hold for now and review its various capital expenditures again. Of course, it plans to continue the data hall work inside the existing M3 building.
It's just that it will prioritize funds for the contracted customer capacity it can deliver within the next 12 to 18 months and for nearly completed projects.
✦ What Makes Up Total Liquidity
End of September, total A$8.675 billion
Investors began to wonder whether NEXTDC has the cash to hold out until it generates revenue properly.
The total liquidity of 'A$8.675 billion' NEXTDC announced at the end of September is the sum of A$1.275 billion in cash, A$6.7 billion in undrawn bank facilities, and A$0.7 billion in hybrid securities.
Of this, the bank facilities are only money you can borrow when needed under conditions, not cash. Anyway, it doesn't look like it's short of available funds right now, but how long the revenue gap from the power supply delay will last is uncertain.
(If it had been short of available funds too, the stock would have plunged even more.)
A Rebound the Day After the Plunge, but a Long Way to Go...
✦ NEXTDC (ASX: NXT) Closing Prices
Sep 28 to Oct 22, Australian trading days, close in A$
NEXTDC's stock had been weak even before the trading halt. It fell about 15.9%, from A$10.91 on September 28 to A$9.18 on October 16. Then it plunged to A$5.35 on October 21 when trading resumed. Investors had a hellish month since October began.
It rebounded 7.48% to A$5.75 the day after the plunge, but considering the decline so far, I can't be sure when the stock will return to where it was.
For the stock to rise again, it has to become clear when the grid work will restart, when additional power supply will be possible, and whether the affected customer contracts can be held on to.
AI Data Centers Keep Stumbling on Power
A data center isn't a business that starts making money the moment you buy and plug in GPUs. Revenue only starts when many conditions, like power lines, permits, and resident consultation, mesh together and work properly.
If you invest in AI infrastructure companies, don't just count planned capacity or contracts won; you should look at when power will reach that capacity and when actual billing can start.
This NEXTDC case showed that this very problem can shake a company's results and stock price in a single day.
This isn't investment advice. You know that, right? Let's each protect our own hard-earned money.
That's all for this post. See you next time.
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