Australian data center operator NextDC experienced a severe market correction on October 22, 2026, with shares plunging 39.5% following a substantial downward revision of its fiscal 2027 guidance [1]. The company cited power supply delays at its Melbourne M3 facility as the primary driver, stemming from suspension of infrastructure upgrades amid community opposition [1]. Revenue guidance was slashed to A$475 million to A$500 million from the previously forecast A$615 million to A$640 million, while underlying EBITDA was cut to A$245 million to A$265 million from A$385 million to A$410 million [1].
The operational challenges stem from electricity distributor Jemena's suspension of work at the M3 Melbourne data center, with the company not expecting to resume operations before February 2027 [1]. Jemena cited safety concerns, restricted access due to community opposition, and lack of consent from the local council pending further community consultation as reasons for the delay [1]. Citi analysts warned that the earnings impact could extend beyond fiscal 2027, citing delays to M3 expansion approvals and a longer-than-expected timeline for transformer upgrades [1].
The market reaction reflects broader concerns about data center expansion. NextDC shares have declined for seven consecutive weeks and are on course to end lower for the eighth week, indicating sustained investor concern [1]. The situation underscores growing opposition to data center buildouts worldwide, driven by concerns over their impact on local communities and the environment [1].
CONCLUSION
NextDC's 40% share price collapse reflects a critical operational setback with earnings implications extending potentially beyond 2027. The Melbourne power supply delays, driven by community opposition and regulatory hurdles, represent a significant headwind for the company's growth trajectory and highlight broader challenges facing the data center industry globally.