Megaport Ltd (ASX: MP1) shares had a standout FY 2026.
Over the 12 months to 30 June, the growing tech share rose almost 50%, while the benchmark ASX 200 index gained around 3%.
Let’s find out why the network services provider’s shares smashed the market.
The Latitude.sh acquisition changed the narrative
Megaport was already known for its network-as-a-service technology, helping businesses connect to cloud providers, data centres, and digital services.
But its acquisition of Latitude.sh pushed the company into a broader market.
Latitude.sh is a compute-as-a-service platform offering high-performance CPU and GPU infrastructure. That gave Megaport a new way to serve customers needing not only connectivity, but also the computing power sitting behind artificial intelligence (AI), cloud-native applications, and data-heavy workloads.
That shifted the market’s view of the company. Megaport was no longer just selling flexible digital connections. It was moving toward a platform combining compute, network, and storage.
In an AI boom, that suddenly looked much more interesting.
Contract wins backed up the strategy
The share price strength was also supported by major contract wins after the Latitude.sh deal.
In April, Megaport announced that Latitude.sh had secured a 36-month compute and storage contract worth approximately A$35.4 million. The company also said Compute annualised recurring revenue (ARR), excluding that contract, had lifted strongly since the acquisition.
The momentum then accelerated in May. Megaport announced three major GPU, CPU, network, and storage contracts across two US-based technology customers running AI applications and inference workloads. Those contracts had a combined total contract value of approximately A$254 million and were expected to add about A$90.6 million in ARR once fully deployed.
That was a major validation point. Investors could see the Latitude.sh acquisition turning into real contracted demand, not just a strategic idea.
AI infrastructure became the bigger opportunity
The excitement increased again in June, when Megaport announced four new major contracts with total contract value of approximately A$458.9 million and ARR of about A$199 million.
These contracts were linked to US-based technology providers running AI applications and inference workloads.
Megaport also announced plans for a globally distributed AI inference cloud, including an on-demand GPU pool. That pointed to a much bigger ambition: giving customers access to compute power closer to users, data, and cloud platforms.
The company backed this with an $827.3 million entitlement offer to fund new compute, network, storage, and GPU capacity.
Capital raisings can sometimes weigh on share prices. But in this case, investors had large contracts and strong AI demand to assess alongside the dilution.
A breakout year
Megaport shares smashed the ASX 200 in FY 2026 because its growth story became larger and more tangible.
The Latitude.sh acquisition gave the company compute exposure, while the contract wins showed real demand from AI-related customers.
It is worth remembering that Megaport still has to deploy capital well, deliver hardware, manage customer concentration, and prove that these contracts convert into attractive returns.
But FY 2026 clearly was the year Megaport moved from cloud connectivity story to AI infrastructure contender, and the share price unsurprisingly followed.
The post Why did Megaport shares smash the ASX 200 in FY26? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Megaport right now?
Before you buy Megaport shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Megaport wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 16 June 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- 10 of the best ASX shares to buy in FY 2027
- 3 ASX tech stocks tipped to rocket higher in FY27
- Here are the top 10 ASX 200 shares today
- These ASX growth shares are up 40%. Can they keep climbing?
- 3 super ASX shares that could be too good to ignore in July
Motley Fool contributor James Mickleboro has positions in Megaport. 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.