Will Macquarie Technology's share price rise on AI-driven data boom?
Leading analysts expected ASX-listed Macquarie Technology to see its share price rise on an AI-driven boom in demand for data services.
ASX-listed data centre operator Macquarie Telecom Group Limited (ASX: MAQ) could see its share price benefit from surging popularity of new artificial intelligence (AI) innovations, all of which will lead to a boom in demand for usable data.
Macquarie is currently seeking to expand its portfolio of data centres in order to capitalise upon an AI-driven rise in demand for digital information, following a sizeable rise in revenue levels.
Artificial intelligence will lead to boom in demand for data
Recent revolutionary breakthrouighs in the field of artificial intelligence have already had a transformative impact upon multiple parts of the economy, including copywriting, translation, programming, graphic design and online chatbot services The impact of artifical intelligence on the modern economy is likely to further increase, as the technology advances and developers and businessses find new applications for the latest innovations.
AI's revolutionary economic impact has also had a deep impact on capital markets and the fortunes of companies that are associated with the new technology. Chipmaker NVIDIA Corp (All Sessions) saw its share price surge earlier this year due to the critical role of its high-end graphic processing units (GPUs) in articial intelligence applications, putting it in third place behind Microsoft and Apple as one of the world's most highly valued tech companies.
Given the immense complexity of AI technology, chipmakers and software developers are far from the only companies who stand to benefit from the popularisation of the new technology.
One of the most critical ingredients behind the effectiveness of AI technology is data - huge volumes of high-quality digital information plays an indispensable role in training AI programs so that theyare capable of making accurate assessments of complex situations or generating visual, audio or linguistic content which is indistinguishable from a human creation.a
For this reason data centres and cloud service providers are amongs the tech comapnies that are best positioned to benefit from the widespread adoption of AI innovations.
Macquarie Technology gears up for expansion
Macquarie Technology is well aware of the boom in demand for data that will result from AI's transformative impact on the economy.
The company recently announced that it plans to expand its data centre portfolio due to the surging demand for cloud and AI services, which has driven an uptick in business performance.
According to its latest half-yearly results, Macquarie's data centre revenue growth outperformed its other business areas, rising 8.4% year-on-year to hit AUD$34.3 million.
The company now plans to 'explore the acquisition of sites to facilitate the growth plan of Macquarie data centres, spporting the sovereign focus of our customer base.'
Macquarie currently owns and operates two campuses in Sydney. One is situated in the downtown business district, while the other goes by the name of the Macquarie Park Data Centre Campus, and its home to Macquarie's IC3 Super West Data centre.
Macquarie announced over the summer that it would increase capacity from a previously planned 38MW to 45MW, in order to deal with the 'megatrend' of AI-related data demand.
Goldman upbeat about Macquarie's expansion
Goldman Sachs is currently bullish on Macquarie, with the broker stating that it is 'poised to demonstrate the accceleration of its data centre growth pipleline through 2024, both from IC3W and a new site in the Sydney metro area.'
The broker also points out that core cloud services and telco businesses are performing well in the interim, leading to a an attractive valuation relative to the company's peers.
Goldman currently has a buy rating for Macquarie Technology, with a price target of $93.00.
How to invest or trade in ASX tech stocks with us
Take your position on over 13,000 local and international shares via CFDs or share trading – all at your fingertips on our award-winning platform.* Learn more about share CFDs or shares trading with us, or open an account to get started today.
* Winner of 'Best Multi-Platform Provider' at ADVFN International Finance Awards 2022.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
