This appeared last week:
NextDC feeds the ducks while they’re hungry
NextDC has played the capital markets game superbly to be on the cusp of the top-50 stocks. To stay there, it has to deliver.
Apr 11, 2024 – 11.26am
Data centre owner NextDC has hit the big leagues – its first $1 billion-plus equity raising that should help catapult it into Australia’s top-50 listed companies.
Fourteen years after floating as an $80 million micro cap, NextDC is riding a wave of customer demand for data centre space and investor appetite for AI’s picks and shovels, to fill its boots, accelerate development at new sites in Sydney and Melbourne and buy more land.
Whether you like NextDC or not – and it is a divisive stock – you have to admire its willingness to launch the “Project Blue” raising and feed the ducks while they’re hungry.
The board and management team have a capital intensive business (buying land and building data centres), a large development pipeline and a forward order book that is through the roof.
So, blessed with a share price up 52 per cent in the past year and an earnings multiple that has exploded to 44 times, it is capitalising on that support and raising $1.32 billion in growth capital – nearly double its previous biggest deal.
While NextDC still needs to spend its $1.32 billion wisely, this is what we want to see from ASX-listed companies. Boards need to be smart enough to realise when investors are willing to throw money at them, bank it in the good times, and use it to progress those growth plans.
That’s how we can have a healthy and thriving listed equity capital market, and get new names like NextDC knocking on the ASX 50’s door and growing into globally relevant public companies.
To be clear, we are not saying NextDC is perfect. It is not; but it is in the right place at the right time.
Here is the link:
https://www.afr.com/chanticleer/nextdc-feeds-the-ducks-while-they-re-hungry-20240411-p5fixx
Also we have this:
NextDC goes high-performance with $1.3b raise for new data centres
Shares in NextDC have surged 51.6 per cent over the past year, as investors clamour for exposure to data centres, one of the hottest assets given their key role in AI and other products that require massive computing capacity.
NextDC boss says nuclear should be on table as AI sucks up energyNextDC shares were halted on Thursday morning as the company launched a one-for-six entitlement offer at $15.40 a share, a 7.8 per cent discount to its last closing price. Chief executive Craig Scroggie said a surge in demand had prompted NextDC to bring forward its capital investment.
“NextDC continues to see significant growth in demand for its data centre services underpinned by powerful structural tailwinds,” he said.
“Amid this backdrop, we have decided to bring forward the development and fitout of key assets in Sydney and Melbourne to ensure we are able to meet this growth in demand, continue to support our customers.”
NextDC is not the only data centre operator benefiting from a jump in demand for cloud computing. AirTrunk – privately owned by Macquarie Asset Management, PSP Investments and its founder, Robin Khuda – has soared to a valuation of more than $15 billion, from just $3 billion four years ago. Its owners are entertaining bids, The Australian Financial Review’s Street Talk column has reported, with plenty of interested parties.
NextDC operates 13 data centres and is developing another nine centres, including new builds in Malaysia and New Zealand.
In February, the Brisbane-headquartered company revealed plans to open its first so-called AI factories – data centres specifically designed to house the processing units sold by chipmakers like NVIDIA.
Mr Scroggie said the facilities were likely to require 10 times the amount of energy used to power the current generation of data centres as well as new cooling methods.
“We’re going from general purpose computing to high-performance computing. That will see a generational change both in the scale and the density of computers,” he said.
Mr Scroggie said the demand for the higher-performance computing services would need to be supported by new energy infrastructure.
“We need power, we need transmission networks, we need green energy, we need more solar, we need more wind and, frankly, we need nuclear,” he said. “We have to find net zero power options that are capable of supporting energy needs when the sun is not shining and the wind is not blowing and batteries [are] not going to cut it.”
The company has not disclosed where its first AI factory would be built. Wilsons analyst Ross Barrows said he had hoped to see more colour on NextDC’s AI facilities in Thursday’s announcement.
“The capital being raised today goes a considerable way to materially expediting built capacity at its existing assets and accelerating the delivery of its development assets, but further insights into new AI-dedicated assets would have added to our understanding of NXT’s medium term growth plans,” Mr Barrows said.
E&P Capital’s Paul Mason said NextDC’s fundraising would find plenty of support among investors. “The raising is probably not a big surprise for many. We have been forecasting another raising in the next two years in our modelling of the company as a result of the very high levels of demand and associated very large build program the company is pursuing,” he said.
More here:
https://www.afr.com/technology/nextdc-raising-1-3b-for-record-data-centre-demand-20240411-p5fiz9
And lastly we have this:
NextDC boss says nuclear should be on
table as AI
Tess Bennett Technology reporter Updated Apr 11, 2024 – 5.16pm, first published at 10.44am
The chief executive of NextDC says nuclear energy should be considered to feed the need for computing power as the company, a major data centre developer, prepares to spend more than $1 billion thanks to record demand for its services in an artificial intelligence boom.
NextDC, the country’s largest listed developer and operator of data centres, is raising $1.32 billion to expand its operations in Sydney and Melbourne.
“We need power, we need transmission networks, we need green energy, we need more solar, we need more wind and, frankly, we need nuclear,” said Craig Scroggie, NextDC’s chief executive. “We have to find net zero power options that are capable of supporting energy needs when the sun is not shining and the wind is not blowing and batteries [are] not going to cut it.” Shares in NextDC have surged 51.6 per cent over the past year, as investors clamour for exposure to data centres, one of the hottest assets due to their key role in AI and other products that require vast computing capacity.
But, as that demand increases, data centres will have to become more sophisticated, and in turn, will need more energy. In February, NextDC revealed plans to open its first so-called AI factories – data centres specifically designed to house the processing units sold by chipmakers such as Nvidia. Mr Scroggie said the facilities were likely to require 10 times the amount of energy used to power the current generation of data centres, as well as new cooling methods. “We’re going from general purpose computing to high-performance computing. That will see a generational change both in the scale and the density of computers.”
JP Morgan analyst Bob Chen said power availability was the “biggest roadblock for data centre construction” and developers would need to find green energy sources to meet their customer’s net zero emissions goals.
“One thing that is also important here is the customers of these data centres, typically your global cloud service providers like Microsoft, Amazon, Google, also have an ESG mandate and are increasingly preferring operators that can source green energy,” Mr Chen said.
Renewable hubs
Patrick Gibbons, a corporate adviser at Orizontas, wrote in The Australian Financial Review earlier this week that the energy demand from data centres could even prolong the life of coal power stations. He noted Amazon had recently acquired a nuclear-powered data centre for $US650 million ($988 million) as the industry looked for reliable power.
Andrew Richards, chief executive of the Energy Users Association of Australia, said data centres required a large, mostly flat load with strong environmental credentials and would be a growing source of demand. “I am not sure that means they automatically jump to nuclear,” he added.
“If it fits into their ESG framework then I assume they would consider it, but it’s clearly not something they could consider here for at least 15 years.”
AGL Energy plans to service data centres from renewable energy hubs based at old generation sites with plenty of network capacity, firmed by a growing fleet of batteries and pumped hydro storage.
Travis Hughes, AGL’s general manager of energy hubs, said while some data centres – such as those servicing banks – required energy all day, others had the flexibility to reduce the amount of firming power required by reducing their substantial loads via demand response.
“This is the energy system becoming smarter,” Mr Hughes said.
NextDC shares were halted on Thursday as the company launched a one-for-six entitlement offer at $15.40 a share, a 7.8 per cent discount to its last closing price. Mr Scroggie said a surge in demand had prompted NextDC to bring forward planned capital investment.
“NextDC continues to see significant growth in demand for its data centre services underpinned by powerful structural tailwinds,” he said.
“Amid this backdrop, we have decided to bring forward the development and fitout of key assets in Sydney and Melbourne to ensure we are able to meet this growth in demand, [and] continue to support our customers.”
NextDC is not the only data centre operator benefiting from a jump in demand for cloud computing. AirTrunk – privately owned by Macquarie Asset Management, PSP Investments and its founder, Robin Khuda – has soared to a valuation of more than $15 billion, from just $3 billion four years ago. Its owners are entertaining bids, The Australian Financial Review’s Street Talk column has reported, with plenty of interested parties.
NextDC operates 13 data centres and is developing another nine centres, including new builds in Malaysia and New Zealand. Wilsons analyst Ross Barrows said he had hoped for more detail on NextDC’s AI facilities on Thursday. “The capital being raised today goes a considerable way to materially expediting built capacity at its existing assets and accelerating the delivery of its development assets, but further insights into new AI-dedicated assets would have added to our understanding of NextDC’s medium-term growth plans,” Mr Barrows said.
E&P Capital’s Paul Mason said improving battery technology would help meet the sector’s growing demand for power, but other sources of energy production would also need to be considered. “The data centre industry wants to decarbonise, but it also really needs stable, reliable power which is presently difficult with renewables on numerous fronts, particularly around grid inertia and intermittency,” Mr Mason said.
Here is the link:
https://www.afr.com/technology/nextdc-raising-1-3b-for-record-data-centre-demand-20240411-p5fiz9
I have to say that with the power consumption of all these data-centres (and all the ones to follow) it is not so silly to think about the use of nuclear power – as our current grud would have to be at some risk of being overwhelmed.
He need for water (for cooling) and the level of power consumption that is likely makes it hjard to be sure renewables could cope!
David.
No comments:
Post a Comment