ASX stock Infratil Ltd (ASX: IFT) surged 12.7% to $11.83 in Wednesday afternoon trade. The surge came after a major announcement from its data centre business CDC.
The ASX stock is now up around 23% year to date, comfortably outperforming the broader S&P/ASX 200 Index (ASX: XJO), which is essentially flat over the same period.
So what’s driving the sharp move higher?
Largest data centre deal
The catalyst for the soaring share price is a landmark contract signed by CDC Data Centres. The company has secured what is being described as Australia’s largest-ever data centre deal.
ASX stock Infratil is an infrastructure investment company with assets spanning renewable energy, healthcare, airports and digital infrastructure. One of its most important holdings is CDC, a rapidly growing operator of hyperscale data centres across Australia.
CDC sits at the centre of rising demand for cloud computing, artificial intelligence infrastructure and sovereign data storage. It builds and operates large-scale, highly secure facilities that underpin the digital services used by governments, enterprises and global technology firms.
The $555MW mega-deal explained
The latest contract is a major milestone for CDC and the ASX stock. CDC has signed a 555MW long-term agreement with a US investment-grade customer. The deal includes a 30-year contract for 555MW of new capacity, with options to extend for a further 20 years. With this agreement,
CDC’s total contracted capacity now exceeds 1 gigawatt. That’s more than double its previous contracted base.
Importantly, the scale of this deal highlights CDC’s dominant position in the market. The 555MW alone represents roughly 40% of Australia’s total expected data centre operating capacity in 2025, underlining just how significant this expansion is for the industry.
The capacity is already under development and scheduled to come online across FY28 and FY29. That means it fits within existing construction plans and does not require a major change in capital strategy.
Strong financial position and growth runway
CDC’s balance sheet remains robust, with about $3.9 billion in cash and undrawn facilities as of 31 March. Earlier this year, shareholders including ASX stock Infratil contributed a further $500 million in equity. However, the latest contract does not require additional funding beyond current plans.
The earnings outlook also remains strong. CDC has maintained FY27 EBITDAF guidance of A$680 million to A$720 million, with FY28 EBITDAF expected to exceed A$1 billion. Beyond this contract, CDC continues to scale aggressively, with a development pipeline of around 1.6GW through to 2034.
The business has also strengthened its funding position. Moody’s Investors Service assigned CDC’s Australian operations a Baa2 (Stable) credit rating, improving access to global debt markets.
Foolish Takeaway
The market reaction reflects the scale and quality of this contract. A long-duration agreement with a major international customer provides strong revenue visibility. It also reinforces CDC’s position as a leading player in Australia’s data infrastructure boom.
For Infratil, it strengthens one of its key growth engines. It also helps explain why the ASX stock is extending its strong run in 2026.
The post Why is this $10 billion ASX stock racing 12% higher today? appeared first on The Motley Fool Australia.
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Motley Fool contributor Marc Van Dinther 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.