NextDC rally comes to a halt. Here’s what just dropped

NextDC Ltd (ASX: NXT) shares are on ice today after a strong run into the end of last week.

The stock closed up 1.58% to $14.12 on Friday and had climbed about 10% over the past 5 trading sessions.

That momentum has now paused, with the ASX confirming a trading halt before market open.

Here’s what investors are watching.

Trading halt tied to $1.5 billion raise

According to the release, NextDC requested the halt pending an announcement tied to a capital raising.

The company is launching a fully underwritten entitlement offer to raise about $1.5 billion.

New shares will be issued at $12.70 each, which sits below the last traded price.

The offer is structured as a 1 for 5.4 pro rata accelerated non-renounceable entitlement offer, with the institutional component already underway.

The halt is expected to remain in place until Wednesday while the raise is completed.

Contracted demand jumps higher

Alongside the raise, NextDC also provided an update on operating momentum.

Pro forma contracted utilisation has lifted to around 667MW as at 31 March, up from 367MW at the end of December.

That is a significant jump over a short period and points to strong customer demand.

The forward order book has also increased to 544MW. This represents future capacity that is expected to convert into revenue over time.

Management pointed to continued demand from hyperscale and AI-related customers as a key driver behind the step-up.

This is the part of the update the market will likely focus on once trading resumes.

Capex lifts to fund expansion

To support that pipeline, NextDC has increased its FY26 capital expenditure guidance.

Capex is now expected to land between $2.7 billion and $3 billion, up from the prior range of $2.4 billion to $2.7 billion. The increase reflects faster development across key projects, including the S4 Sydney site.

The company is also accelerating work across its broader footprint to bring new capacity online sooner. This lines up with the jump in contracted utilisation and the size of the forward order book.

Funding position expands

Following the raise and recent funding activity, NextDC expects pro forma liquidity of about $5.9 billion. This includes cash, undrawn debt facilities, and proceeds from both the entitlement offer and hybrid securities.

The company has also pointed to additional funding options, including wholesale debt and potential joint venture structures.

The way I see it, this is a clear push to scale faster while demand is there. The trade-off is dilution, and the size of the raise is not small.

After a solid run into last week, I would expect some pressure once trading resumes as the new shares are absorbed.

The post NextDC rally comes to a halt. Here’s what just dropped appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.