Australia's Megaport rallies after bagging $687-million AI contracts (updated)

China AI Infrastructure

29/09/2026 01:52

Recasts with background, analyst comment and share moves
By Jasmeen Ara Islam Shaikh and Rajasik Mukherjee
Sept 29 (Reuters) - Australian network and cloud services provider Megaport MP1.AX said on Tuesday it won three AI infrastructure contracts worth about A$978.6 million ($686.88 million) and raised its annual earnings forecast, sending its shares nearly 21% higher.
The new deals highlight Megaport's transformation into an AI infrastructure provider following its acquisition of Latitude.sh, as rising demand for graphics processing unit (GPU) computing fuels long-term technology spending.
The contracts, signed through Latitude.sh, are expected to add A$232.4 million in annual recurring revenue (ARR) once fully deployed. 
The deals lift pro forma group ARR to about A$1.1 billion and bring the total value of strategic AI infrastructure contracts announced since April to roughly A$2.3 billion, including four similar deals worth A$458.9 million secured in early June.
"The test is now execution: installing the equipment on time, converting contracted value into revenue, and earning an adequate return on a much larger capital base," said Mark Gardner, founder and CEO of MPC Markets.
"Nearly a billion dollars of contract value is impressive. It is not a billion dollars of revenue today."
Shares of Megaport rose as much as 20.5% to A$22.720, their highest since August 13, while the benchmark stock index .AXJO was up 0.2%.
Megaport, which uses Nvidia NVDA.O and AMD AMD.O chips  and operates across more than 1,100 data centres in 31 countries, also lifted its 2027 revenue forecast to A$720 million-A$810 million from A$620 million-A$730 million.
It also lifted its FY27 capital expenditure forecast to A$1.78 billion-A$1.88 billion from A$1.28 billion-A$1.38 billion to support the new contracts and replenish its GPU pool.

($1 = 1.4247 Australian dollars)

 (Reporting by Rajasik Mukherjee & Jasmeen Ara Shaikh in Bengaluru; Editing by Perla Velasco, Sherry Jacob-Phillips and Subhranshu Sahu)
 ((JasmeenAraIslam.Shaikh@thomsonreuters.com))