A $2 billion ASX tech stock just handed investors a 50% gain in a single month. Now, the bigger question is keeping everyone up at night: is the rally just getting started? Brokers are still piling on with buy ratings, and the most bullish analyst on the street says Megaport Ltd (ASX: MP1) could climb as high as $24 per share, pointing to a potential upside of around 142% from current levels.
What Megaport Does and Why It Matters Right Now
Megaport is a Brisbane-based company and the world’s leading Network as a Service (NaaS) provider. It allows businesses to connect their infrastructure to cloud providers, data centres, and internet services instantly, without needing to build expensive physical networks.
Think of it as the invisible plumbing of the digital economy. When companies need to shift massive workloads between cloud platforms or power AI systems in real time, Megaport is often the engine quietly making it happen.
Its platform now spans more than 1,000 enabled locations across 150 cities in 26 countries. That kind of reach is hard to replicate, and it is exactly the kind of competitive moat that makes long-term investors sit up straight.
Routing and edge product deployments on the platform grew 42% year on year, according to Megaport’s own 2025 Cloud Network Report. That tells a clear story: enterprises are rapidly moving away from static cloud setups toward smarter, more programmable network infrastructure. And Megaport sits right in the middle of that shift.
The Latitude.sh Deal That Changed Everything
The single biggest catalyst behind Megaport’s transformation came in November 2025. The company completed its acquisition of Latitude.sh, a global Compute as a Service platform, for a deal worth up to US$300 million ($459 million). Megaport funded the purchase through a $200 million institutional placement at $14.30 per share.
Latitude.sh delivers high-performance CPU and GPU compute infrastructure on demand, operating across 23 data centre locations globally. Its platform can deploy workloads in as little as five seconds. That speed matters enormously to the AI-first companies that Megaport is now targeting.
By pairing network connectivity with on-demand compute, Megaport is no longer just a networking company. It is positioning itself as a full-stack infrastructure platform purpose-built for AI workloads.
CEO Michael Reid captured the vision clearly after the deal closed, saying Megaport is “building an industry-leading platform where network and compute converge globally,” adding that it “positions Megaport at the heart of the hybrid cloud and AI-driven future.”
The early results from Latitude.sh are already turning heads. Compute ARR grew 31% to US$58.7 million as of late April 2026, up from US$45 million at the end of December 2025. That is a significant acceleration in just a few months.
Most recently, Latitude.sh locked in a new US$25.1 million compute and storage contract over 36 months with a high-growth US technology company focused on agentic AI applications. The deal adds approximately US$8.4 million in annualised recurring revenue. Megaport plans to invest around US$12.2 million in additional CPU servers to deliver it, expecting to recover that investment within 24 months.
The Numbers Behind the Growth Story
Strip away the noise, and Megaport’s financials are telling a compelling story about the direction of the business.
- H1 FY26 revenue: $149.2 million, up 26% year on year
- H1 FY26 EBITDA: $35.5 million, with a margin of 23.8%
- Gross profit: Up 31%, gross margin improved to 72%
- Network ARR: $272 million at March 31, 2026, up 23% year on year in constant currency
- Net revenue retention rate: 111%, meaning existing customers are spending more over time
- FY26 revenue guidance: Reaffirmed at $302 million to $317 million
That net revenue retention figure of 111% deserves special attention. It means Megaport is not just keeping its customers. Those customers are actively growing their spending on the platform. In the world of software and infrastructure businesses, that metric is often the difference between a good company and a great one.
The weak spot for now is statutory net income. One-off acquisition costs and heavy reinvestment hit the bottom line in the first half of the year. But analysts widely expect those pressures to fade as the Latitude.sh integration matures and the cross-sell machine begins to work.
What Brokers Are Saying About MP1 Right Now
Despite the sharp one-month rally, Wall Street and ASX broker sentiment toward Megaport remains overwhelmingly positive. That alone is notable.
12 of 15 brokers currently rate MP1 as either a buy or strong buy. Not a single broker carries a sell rating on the stock.
The average analyst price target sits at $15.32, implying roughly 55% upside from current levels. After a 50% move, that is still a significant call. The most bullish analyst on the street has placed a target of $24 on the stock, which works out to approximately 142% upside from where shares are trading today.
Analysts forecast Megaport to grow earnings by 46.4% and revenue by 22.2% per annum over the coming years. Revenue growth is expected to run more than three times faster than the broader Australian market’s forecast pace of around 5.9% per year.
The company is also forecast to reach profitability within three years, which would represent a major inflection point for a stock that has historically traded on growth expectations rather than earnings.
Risks Investors Cannot Afford to Ignore
The bull case for Megaport is real. But so are the risks, and any honest assessment of this stock needs to account for both sides of the ledger.
Competition is intensifying. Megaport faces pressure from established interconnection giants like Equinix, as well as a growing wave of software-defined networking startups all chasing the same large enterprise customers. Maintaining its pricing power and market share over the long run will not come easy.
Profitability is still a work in progress. Statutory earnings remain in negative territory, largely due to acquisition costs and heavier-than-usual reinvestment. The market is currently willing to look past that, but only for so long.
Execution is the real test. The Latitude.sh integration is still in its early stages. Key questions remain unanswered: How quickly will customer cross-sell accelerate? When do the acquisition-related costs stop dragging on earnings? How well does the combined platform scale under real enterprise demand?
Then there is the stock’s natural volatility. MP1 carries a high beta, meaning it tends to move more sharply than the broader market in either direction. The same force that drove a 50% gain in a month can just as easily reverse if sentiment turns.
| Factor | Bull Case | Bear Case |
|---|---|---|
| Revenue Growth | 22.2% per annum forecast | Misses guidance if integration stalls |
| Broker Sentiment | 12 of 15 brokers say buy | JPMorgan flagged execution risk |
| Recurring Revenue | 111% net revenue retention | Customer concentration risk remains |
| AI Demand | Unprecedented compute demand | Market may overprice that opportunity |
| Profitability | Forecast profitable in 3 years | Acquisition costs still a drag today |
Megaport’s 50% surge in one month is dramatic by any measure. But the data underneath that rally, from the 111% net revenue retention and the reaffirmed $302 million to $317 million FY26 revenue guidance, to the fresh Latitude.sh AI compute contract and 12 out of 15 brokers still calling it a buy, suggests this may be less a peak and more a pivot point. The company is catching the tailwind of two of the most powerful forces in global technology right now: AI infrastructure demand and cloud networking growth. Whether it doubles from here will come down to how well the Latitude.sh integration delivers and how aggressively enterprise customers lean into AI infrastructure over the next 12 to 18 months. The story is far from over. What do you think: is Megaport still a buy after this rally, or has the easy money already been made? Leave your thoughts in the comments below.
