Data Center Stocks are Hot Internationally

Analysts and investors are increasingly excited about data center stocks, and recent performance of a data center provider that went public six years ago in Australia illustrates that the excitement isn’t limited to US markets or the short list of US-based data center giants.

Nextdc, one of the biggest data center providers in Australia, founded by the country’s well-known tech infrastructure entrepreneur Bevan Slattery, is not only the most expensive among six stocks added to the S&P/ASX 200 Index this month; it is the Australian benchmark index’s most expensive stock, period. Nextdc reached its record value last week, and analysts are bullish, according to Bloomberg.

Similar to the biggest US-based data center stocks, Nextdc is outperforming the index it has been included in. The seven publicly traded US data center REITs (Equinix, Digital Realty Trust, CoreSite Realty, QTS, CyrusOne, DuPont Fabros Technology, and Iron Mountain) have all outperformed S&P 500 so far this year, riding the wave of growth by the giants that provide cloud and other internet services, such as Google, Amazon, and Microsoft, who have been gobbling up data center space at record rates.

See also: Silicon Valley Billionaires’ Wealth Manager Enters Data Center Market

Nextdc's SY1 data center in Sydney (Photo: Nextdc)

Nextdc has eight data centers, located in Melbourne, Brisbane, Sydney, Perth, and Canberra. Last year, it partnered with CenturyLink to provide data center services in Australia to the Monroe, Louisiana-based company’s customers.

It isn’t the only company Slattery has taken public. One of his latest ventures, Megaport, an SDN-enabled data center connectivity services firm, went public in December 2015, raising AU$25 million.

The business Slattery launched most recently is Cloudscene, which provides an online directory of data centers and service providers around the world.

Read more: Another Huge Quarter for Data Center REITs: What's Next?