Shares of Australian data center operator NextDC fell sharply by nearly 40% after the company revised its fiscal year 2027 earnings forecast downward. These cuts were primarily due to delays in power supply upgrades at its M3 facility in Melbourne, where infrastructure work has stalled amid opposition from local communities and stakeholders. NextDC now projects revenue between A$475 million and A$500 million, a significant drop from its earlier estimate of A$615 million to A$640 million. The company also trimmed its EBITDA forecast to a range of A$245 million to A$265 million, down from prior guidance of A$385 million to A$410 million.

The power supply delay stems from a suspension of necessary electrical infrastructure upgrades by utility company Jemena, which does not expect to resume work until February 2027. Jemena cited safety concerns, limited access to work sites caused by community resistance, and a lack of approval from the local council pending further consultative processes. This disruption has forced NextDC to push back its expansion plans and upgrade timeline, creating uncertainty around its near-term financial outlook.

Analysts at Citi warned that these setbacks might continue to weigh on NextDC’s earnings beyond the current fiscal year, given delays in obtaining regulatory approvals for expansion and in upgrading key transformers. The company’s shares have struggled for nearly two months, with a consecutive decline that reflects investor concerns about the operational and financial impacts of the power supply issues at the crucial Melbourne site.

On a broader level, Australia’s government is working to establish nationwide investment standards for data centers and AI infrastructure, according to Treasurer Jim Chalmers. While welcoming investment that aligns with national interests, authorities are mindful of growing opposition relating to social and environmental impacts from such developments. This reflects a global trend in data center projects facing pushback as communities increasingly scrutinize their effects on local environments and infrastructure.