The Megaport Ltd (ASX: MP1) share price is on fire today.
Shares in the S&P/ASX 200 Index (ASX: XJO) network services company closed on Monday trading for $16.61.
The ASX 200 tech stock then entered a trading halt on Tuesday while Megaport conducted an $827 million capital raising via a fully underwritten entitlement offer.
This morning, the stock recommenced trading on the ASX after announcing that it has successfully completed the institutional component of that capital raising.
Following this news, the Megaport share price is up to $18.13 in late morning trade on Friday. That sees shares up 9.1%, despite the broader 0.6% decline on the ASX 200 today.
It also means that investors who managed to snap up shares at the intraday lows of $6.40 on 13 April are now sitting on gains of 183.3%. That’s enough to turn a $6,000 investment into $16,997. In less than two months!
We’ll look at Citi’s latest forecast for the surging tech stock below.
But firstâ¦
What did the ASX 200 tech stock announce?
The Megaport share price is surging after the company said it raised approximately $518 million from its institutional entitlement offer.
The company will issue approximately 36.2 million new shares at $14.30 each. That’s 13.9% below Monday’s closing price, and 21.1% below the current price.
Management said the company will proceed with the retail offer, which will provide retail stockholders the opportunity to invest at the same discounted institutional offer price. The company expects the retail component of the capital raise to bring in $309 million.
The company plans to use the new capital to fund its global growth plans. On Monday, for example, Megaport announced that it had signed four new AI infrastructure contracts valued at $459 million.
“This exceptional outcome reflects the strong support of our institutional shareholders and their confidence in our strategy,” Megaport CEO Michael Reid said.
Looking ahead, Reid added:
By combining Megaport’s global footprint of more than 1,100 data centres in 31 countries with Latitude.sh’s platform capabilities, we are building a Globally Distributed AI Inference Cloud designed to support AI at global scale.
We now look forward to our retail shareholders having the same opportunity to participate on a pro rata basis. We’re just getting started. Game on!
What is Citi forecasting for the Megaport share price now?
Following a series of recent AI contract wins, and with Megaport’s strengthened balance sheet leaving it well-funded to take on more AI-related contracts, Citi upgraded its target for the Megaport share price by 41% to $22.10 (courtesy of The Australian Financial Review).
That represent a further potential upside of almost 22% from current levels.
The broker foresees strong earnings growth for the ASX 200 tech share, boosting its FY 2027 earnings before interest, taxes, depreciation and amortisation (EBITDA) forecast for the company by 73% to around $255 million.
The post Up 183% since April, why the Megaport share price is tipped to keep charging higher appeared first on The Motley Fool Australia.
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More reading
- ‘Game on!’ Why Megaport shares are rocketing 27% today
- Megaport completes $518m institutional entitlement offer
- 5 things to watch on the ASX 200 on Friday
- Up 148% since April, should I still buy Megaport shares today?
- How high does Macquarie think Megaport shares will go?
Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. 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.