Fair bit of speculation here, around future charge out rates!
They effectively rent space, under the co-location model right?
The variables that go into determining what the market rate for that space is, are many and complex.. But its mostly contracted right? Can they just double the rate? Or are the broadly locked in?
Speaking of the future, and improving technology.... Has anyone here considered what could happen if we made some breakthroughs in quantum computing?
Or some new storage ideas?
Imagine if we suddenly only needed 10% of the worlds installed DC floor space, because we suddenly 100x processing or storage abilities?
Okay, that's an extreme example, but the point here is
1. Stuff keeps changing. NextDC is being priced like it will make ever growing NPAT decades into the future. Is this rational, in such a fast changing world?
2. The very fact that stuff keeps changing, is why the capex will never end.
I can't see this company ever making meaning NPAT. Things will keep changing, the capex will never end, they will keep chasing their tail, only ever talking about growth and revenues, and always in fine print down the bottom how they made another statutory loss.
Lastly... Is NextDC REALLY a tech/AI company? Or just a REIT/landlord?
Trading at a EV to revenue of 25 to 1 is a heady valuation, and implies tech/ai... but I'm not sure it really is.
So I guess that's some of why it all seems a bit frothy to me
NXT Price at posting:
$17.65 Sentiment: Sell Disclosure: Not Held
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