Shares in NextDC, one of Australia's biggest data centre operators, collapsed on Wednesday, 21 October 2026, after the company said power delays at its Melbourne site would wipe out much of its expected growth. The stock closed down A$3.83, or 41.7%, at A$5.35, the worst performer on the ASX 200, according to ABC News. Investing.com reported a fall of 42.1%, taking the shares to their lowest since January 2018.
What went wrong
Electricity distributor Jemena suspended parts of the grid works needed to power NextDC's M3 data centre in West Footscray, Melbourne, because of community and stakeholder opposition. NextDC said existing grid supply "cannot be relied upon to support the full contracted power ramp," according to Investing.com. The next increase in grid supply for M3 has been pushed back to the 2028 financial year.
Guidance slashed
| FY27 guidance | New | Previous |
|---|---|---|
| Net revenue | A$475–500 million | A$615–640 million |
| Underlying EBITDA | A$245–265 million | A$385–410 million |
| Capital spending | A$4.5–5.0 billion | A$5.25–5.75 billion |
Chief executive Craig Scroggie said the affected M3 contracts had been removed from FY27 guidance "until we can reliably estimate their contribution," ABC reported. The contracts remain in place, but NextDC is assessing possible service credits and customers' rights to terminate.
All new development projects and land purchases are on hold, and the company may sell some sites.
A warning for the AI boom
The episode shows that the biggest constraint on the AI data centre boom is often not chips or money, but electricity and local approval. Data centres need enormous amounts of power, and new grid connections can face long delays and community resistance. On the same day, Nvidia promoted container-based AI factories that can be deployed in weeks, but they still need a prepared site with power.
What happens next
NextDC's board will report on its spending review by its annual general meeting on 20 November. A Victorian planning decision on later stages of M3 will wait until after the state election on 28 November.
This article is for information only and is not investment advice.
