NEXTDC Ltd (ASX: NXT) shares have suffered an extraordinary sell-off on Wednesday.

The data centre operator’s shares have fallen as much as 45% to $5.10 following an announcement that has raised serious concerns about its near-term outlook.

It is a significant setback for a company that has been investing heavily to capitalise on growing demand for data centre capacity.

But has the market reaction created an opportunity for long-term investors? Here’s what I think.

What has happened to NEXTDC?

The main issue is a delay in delivering electricity to NEXTDC’s M3 Melbourne data centre.

Electricity distributor Jemena has suspended parts of the network works required to increase power supply to the facility, citing community opposition and difficulties obtaining the necessary approvals.

NEXTDC now expects the next increase in power supply during FY28, delaying its ability to deliver and bill customers for contracted capacity.

This has forced management to make substantial reductions to its FY27 guidance.

Underlying EBITDA is now expected to be between $245 million and $265 million, down from its previous forecast of $385 million to $410 million.

Net revenue guidance has also been reduced from $615 million to $640 million to between $475 million and $500 million.

Those are significant downgrades, and I can understand why investors are concerned.

There is also uncertainty surrounding the affected customer contracts, which include provisions for compensation or potential termination if capacity cannot be delivered as agreed.

A separate planning decision for further expansion at M3 has also been delayed until 2027.

Clearly, NEXTDC has some difficult issues to work through.

Why I would buy NEXTDC shares

Despite these setbacks, I still believe NEXTDC has an exciting long-term future. The company is developing critical infrastructure for cloud computing, artificial intelligence (AI), and the broader digital economy.

I expect demand for these services to increase considerably over the coming decade as businesses invest in more computing capacity. And I think NEXTDC remains well positioned to participate in that growth.

One important detail from today’s announcement is that the affected M3 capacity remains contracted, subject to the customer’s rights.

That gives me some hope that a substantial portion of the delayed revenue could eventually be realised once the electricity issues are resolved.

Management is also taking steps to protect the business. NEXTDC has reduced its capital expenditure guidance and is prioritising projects supported by near-term customer contracts.

It reported approximately $8.7 billion in available liquidity at the end of September, although most of this comprises debt facilities and access remains subject to conditions.

I think the decision to focus spending on contracted capacity is sensible while the company works through the uncertainty.

For me, the investment case remains centred on the enormous demand for data centre infrastructure over the next decade. At around $5.10, I think the potential long-term rewards for investors could be substantial if NEXTDC can resolve its current problems and deliver on its contracted growth opportunities.

Foolish takeaway

I think Wednesday’s extraordinary sell-off has created an opportunity to buy NEXTDC shares for the long term.

There could be considerable volatility ahead, and the problems at M3 will take time to resolve.

But I would be willing to accept that uncertainty for the opportunity to own a business operating in what I believe will be one of the world’s most important growth industries over the coming decade.

The post Should I buy NEXTDC shares after today's 45% crash? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.

The Beach Energy Ltd (ASX: BPT) share price is in focus after the company reported quarterly production up 9% to 5.4 million barrels of oil equivalent (MMboe) and record sales revenue of $565 million, a 41% jump on the previous quarter.

What did Beach Energy report?

• Production rose 9% quarter-on-quarter to 5.4 MMboe, with August recording a six-year monthly high.
• Sales revenue surged 41% to $565 million, Beach’s highest-ever quarterly result.
• Average realised gas price improved 7% to $11.9 per gigajoule (GJ); average realised oil price was $166 per barrel.
• Sales volumes climbed 32% to 6.3 MMboe, aided by the timing of LNG and oil liftings.
• Capital expenditure fell 46% to $129 million as offshore abandonment works were completed.
• Total liquidity stood at $945 million, with $205 million in cash and $740 million in undrawn debt facilities.

What else do investors need to know?

Beach’s Waitsia Gas Plant performed strongly, achieving record monthly output in August and returning to full operation after planned maintenance in September. The completion of the Equinox rig abandonment campaign means no significant offshore abandonment spending is expected until the mid-2030s, reducing near-term cash flow risks.

The company settled a long-running shareholder class action for $43.5 million, to be fully covered by insurance and with no impact on FY27 financials. In gas marketing, Beach signed new medium-term contracts, including its first JKM-linked domestic gas sales deal on the East Coast, improving both supply flexibility and pricing.

What did Beach Energy management say?

Managing Director and Chief Executive Officer Brett Woods said:

We delivered a strong start to FY27, with production up 9% to 5.4 MMboe and sales revenue increasing 41% to $565 million for the quarter, which is the highest quarterly sales revenue result ever realised by Beach. The result reflects disciplined execution across our operations and stronger performance from the Waitsia Gas Plant, which achieved a record average monthly production rate of 219 TJ/day in August.

What’s next for Beach Energy?

Beach reaffirmed FY27 guidance for production (19.5–23.0 MMboe) and capital expenditure ($600–700 million). Looking ahead, management is focused on portfolio optimisation, progressing new gas contracts with flexible pricing, and advancing key projects such as the Waitsia Inlet Compression and Otway nearshore developments.

Exploration, drilling and infrastructure upgrades remain a priority, with near-term work aimed at supporting future production and extending asset life. The company continues to engage with regulators and partners as it advances its growth pipeline.

Beach Energy share price snapshot

Over the past 12 months, Beach Energy shares have fallen 22%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 3% over the same period.

View Original Announcement

The post Beach Energy posts record Q1 sales revenue and higher production appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) has climbed higher over the past week thanks to a rebound in bank, healthcare, and energy stocks.

Find out how three major ASX 200 shares, Austal Ltd (ASX: ASB), and BHP Group Ltd (ASX: BHP), and Westpac Banking Corporation Ltd (ASX: WBC) are tracking. And which one brokers rate as a buy, a hold, and a sell.

Brokers rate Austal shares as a buy

Austal shares have jumped 12% higher over the past week, up to $4.18 a piece at the time of writing. The rebound is great news for investors but there is still some way to go before the Australian-based global shipbuilding company and defence prime contractor’s shares have recouped losses shed earlier this year.

The shares are still down around 38% for the year-to-date and 39% lower than this time last year.

There hasn’t been any specific price sensitive news out of the company to explain the rebound over the past week, but there are media reports that the company is still weighing up two competing offers for its US operations. 

Wildcat Infrastructure launched a non-binding counter-bid of US$1.25 billion to US$1.35 billion to acquire Austal’s US operations as a standalone platform last month. This proposal directly competes with Hanwha Group’s earlier US$1.05 billion to US$1.20 billion buyout offer.  

Last week Austal confirmed that it had extended the due diligence period provided to Hanwha Defence USA, Inc. to enable it to firm-up its indicative, non-binding and conditional offer into a binding offer for Austal USA.

Brokers are optimistic that Austal shares can rally even higher. According to Market Index, the majority have a buy rating on the shares and the $5.36 average target price implies a 28% upside, at the time of writing.

Brokers rate BHP shares as a hold

BHP shares are also in focus this week after the mining giant posted its first quarter FY27 update on Tuesday. 

The company announced steady iron ore production and stronger realised prices, despite a drop in copper output. The miner also confirmed that there is no change to its FY27 production or unit cost guidance across core divisions.

The update follows two fatalities at its Escondida and Peak Downs sites during the quarter. These have prompted company-wide safety reviews and temporary operational pauses at the affected sites.

At the time of writing, BHP shares have fallen around 3% over the past week, to $59.50. Despite the decline, the shares are still trading around 30% higher for the year-to-date and they’re up around 35% compared to 12 months ago.

But the experts are still reserved about where the ASX mining shares could go from here. Market Index data shows the majority have a hold rating on the shares. And the $62.63 average target price implies a potential 5% upside, at the time of writing.

Brokers rate Westpac shares as a sell

Westpac shares are largely flat over the past week, to $35.13 at the time of writing. The ASX bank shares have now fallen around 10% for the year-to-date and are 10% lower than this time last year.

It looks like investors are sitting tight on Westpac shares ahead of the bank’s FY26 earnings announcement on the 2nd of November. Investors are likely waiting to see how the bank’s net interest margins and revenue. The bank is guiding revenue growth of 3-5% and a cost-to-income ratio of 51-53%.

On Monday, Westpac announced a $41 million pre-tax notable item in the second half of FY27 for expenses related to the RAMS litigation matters and associated legal costs.

Elsewhere in the bank sector there has been a rebound in confidence following fresh unemployment data and renewed confidence that the RBA will pause rates for the near future.

Market experts think that there is potential for Westpac shares to fall further. Market Index data shows the majority have a sell rating on the stock, and the $34.18 average target price implies a potential 3% downside, at the time of writing.

The post ASB, BHP, Westpac shares: Buy, sell, hold appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has positions in BHP Group. 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 recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.