NEXTDC, Where the Cloud Lives

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The digital age, it’s the new industrial revolution. More and more businesses are moving to cloud-based platforms and business models.

Much of what we do is powered by the cloud. It’s revolutionising the way we work, and play.

The internet of things, artificial intelligence, 5G, self-driving cars, drones, and global security — just to name few — are all powered by the cloud.

This trend is just taking off.

And it’s creating huge amounts of data, which has to live somewhere…

It lives in huge data centres across the globe. It’s these data centres which provide the critical infrastructure which enable cloud providers and power the digital age.

One could keep one eye on data centre stocks, as this trend isn’t going away any time soon. Exponentially, information is being uploaded, shared, and streamed across multiple devices.

One ASX stock in this space is NEXTDC Ltd [ASX:NXT]. They’re building the infrastructure that enable cloud providers and power the digital economy.

The company reported full year results last August, let’s go through the numbers.

It was another year of record revenues and earnings. Customer growth was up 22%. Revenues were up $23 million, or 15%, and earnings likewise were up by $9.5 million, or 13%.

Forward guidance was for continued strong revenue and earnings growth.

Let’s bring it up. Here’s the weekly chart:

Port Phillip Publishing

Source: Optuma

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Stocks do not go up in a straight line. At some point they must retrace and consolidate prior gains. This is exactly what NEXTDC has done.

The share price continues to hold and trade above good full year results. That’s often a positive sign.

What now for NXT?

Well, let the weight of money be your guide. The share price continues to trade a sideways range, consolidating the gains from the prior strong run-up.

That gives you some reference points to work with.

The share price is finding support around $5.70 or so. And resistance at around $7.20 or so.

A strong break either way might suggest which way revenues are heading when the company comes to report half-year results in late February.

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