NextDC Shares Plunge 42% After Grid Delay Forces Forecast Cut

NextDC shares fell 41.7% on Wednesday after the Brisbane-based data center operator slashed its annual revenue and earnings forecasts, citing community opposition and delayed grid upgrades at its M3 Melbourne facility.

The company now expects revenue of 475 million to 500 million Australian dollars ($333 million to $350 million) for the year, down sharply from its previous guidance of 615 million to 640 million Australian dollars. NextDC also cut its EBITDA forecast to between 245 million and 265 million Australian dollars ($172 million to $186 million).

The numbers tell one story. The cause is another.

What stalled the Melbourne data center?

In a filing to the Australian Securities Exchange, NextDC blamed setbacks at M3 Melbourne. Jemena, the electricity provider supplying power to the site, suspended part of its network improvement works last month and does not expect to restart them before February 2027.

"Jemena has suspended parts of the network works required for the next increase in grid supply to M3 Melbourne," CEO Craig Scroggie said in the stock filing. "Jemena has attributed the suspension to community and stakeholder opposition to the works and to the absence of local council consent pending further consultation."

The fallout extends beyond guidance. NextDC cut capital expenditure by 750 million Australian dollars ($527 million) and put land acquisitions and new development projects "on hold for the foreseeable future."

Australian data centers — much like their U.S. counterparts — are drawing protests from local communities. Residents worry about strains on power and water supplies, plus worsening noise pollution.

The share plunge shows how local permitting fights can now move a listed company's numbers by hundreds of millions.

Is NextDC alone in the rout?

No. The company's 42% drop caps a brutal stretch for data center and AI infrastructure businesses worldwide.

On Oct. 9, Firmus, another Australian data center operator, abruptly canceled its Australian IPO — an offering that was set to be one of the country's largest debuts. The company said it would raise funds through private markets instead. Investors were reportedly concerned about its debt load and lack of a construction track record.

On Oct. 13, AirTrunk, a Blackstone-owned data center operator, postponed a Singapore listing for its real estate investment trust, according to media reports.

In the U.S., bonds from neocloud provider CoreWeave dropped below 80 cents on the dollar last week — a level that typically signals financial strain. Tesla CEO Elon Musk noticed, posting "yikes" on X.

Then on Oct. 20, shares of South Korean cloud provider Elice Group plunged 32% on their first day of trading. They recovered 30% on Wednesday, hitting the daily limit.

Who's next?

More dominoes may be about to fall. Singapore-based DayOne Data Centers is weighing a delay or size cut for its upcoming U.S. IPO, Bloomberg reported Wednesday, citing unnamed sources. DayOne declined comment to Bloomberg and did not immediately respond to Fortune's request for comment.

With sentiment souring across three continents and community opposition now measurable in guidance cuts, the sector's growth story depends on power grids — and the neighbors standing next to them.