Megaport’s rally on the ASX 200 follows news that subsidiary Latitude has locked in three large GPU, CPU, network and storage contracts worth USD182 million, or about $254 million. Investors push the share price up 36.55% to $13.45 by 12:24pm AEST on 14 May, reflecting enthusiasm for the new US-based technology customers.
Latitude’s wins coincide with Megaport warning that its FY26 group capital expenditure will climb materially to support the build-out. Market reaction shows investors are currently comfortable trading near-term cash demands for exposure to high-performance AI infrastructure demand.
Under the agreements, Megaport commits to USD101 million in extra capital expenditure to buy high-performance Nvidia GPUs and related hardware, funded through a mix of existing cash and debt facilities. Management keeps FY26 revenue and earnings guidance intact, signalling that near-term profitability expectations remain unchanged despite the capex spike.
FY26 group capex is now projected to rise by a further $140.3 million, highlighting the scale of the infrastructure rollout required to service the three contracts. Latitude’s deals span two major US technology providers, embedding Megaport deeper into the cloud and AI supply chain.
Analysts at UBS maintain a buy rating on Megaport with a price target of $14.65, arguing the multi-year contracts represent a meaningful strategic and financial win. Their modelling points to a potential 45% return over the initial three-year term of the agreements even without any contract extensions.
UBS also indicates that the new deals should drive upgrades to group EBITDA assumptions, estimating roughly 30% upside to its FY27 EBITDA forecast and about 26% upside versus Visible Alpha consensus. Management expects the roughly two-year payback period on the Nvidia-driven capex to underpin that earnings acceleration.
Megaport frames the move as positioning the business at an industry inflection point, where AI workloads shift from foundation model inference towards more distributed edge use cases. The company’s globally distributed, automated connectivity platform is being pitched as essential infrastructure for these next-generation AI applications.
If the contracts perform as anticipated, Megaport is set to emerge as a more central player in the high-performance compute ecosystem, bridging cloud providers and enterprises. The immediate trade-off is heavier balance sheet use and execution risk around deploying capital quickly enough to meet surging GPU demand.
