NEXTDC vs SXE: Which ASX Stock Will Benefit More From Australia’s AI Data Centre Boom?

NEXTDC Limited (ASX: NXT) and Southern Cross Electrical Engineering Limited (ASX: SXE) are both positioned to benefit from the rapid expansion of Australia’s data centre market. But which of these ASX stocks offers the better opportunity for investors right now?

Australia’s data centre industry has entered an important growth phase, driven by artificial intelligence and the demand for much larger, more power-intensive computing facilities. Firmus has emerged as one of Australia’s most ambitious AI infrastructure players, recently stating that its contracted capacity had surpassed 900MW across a portfolio of seven AI factories.

Companies supplying the infrastructure required to build and operate these facilities could benefit significantly. Two such companies are NEXTDC, Australia’s leading independent data centre operator, and Southern Cross Electrical Engineering, a specialist contractor providing electrical, communications and other critical infrastructure services.

Both stocks can benefit from the same underlying trend, but their exposure is very different. NEXTDC owns and operates data centre infrastructure, whereas SXE earns revenue by helping to build it.

NEXTDC: The Direct AI Data Centre Play

NEXTDC offers a more direct way to gain exposure to the long-term growth of Australian and Asia-Pacific data centre capacity. Its business focuses on the ownership and operation of critical digital infrastructure.

In FY26, the company reported net revenue of $405.0 million and $248.8 million of EBITDA. It also had 740.1MW of contracted utilisation and 175MW of billing utilisation, highlighting the significant scale it has already achieved.

Growth has accelerated as hyperscalers and AI customers have increased their requirements. Contracted utilisation reached 667MW in April 2026, while the forward order book reached 544MW.

However, the business is capital intensive, as significant funding is required to build capacity ahead of customer demand. NEXTDC currently has a market capitalisation of $7.98 billion, while its forward EV/EBITDA is 33.46, compared with an industry median of 10.24. This indicates that the market already places a substantial premium on its growth prospects.

SXE: Building the Infrastructure Behind AI Data Centres

SXE provides a different and more diversified way to participate in the data centre boom. Its services cover electrical, communications, security, fire and maintenance requirements.

The company has also worked across data centres for more than 20 years, giving it an established position in a rapidly expanding market.

Its financial performance is particularly encouraging. SXE generated $120 million of data centre revenue in FY26 and expects this figure to triple in FY27. Its overall order book also reached a record $810 million, up 18.2% from the prior year.

In FY26, underlying EBITDA increased 40.5% to $77.0 million, while underlying NPAT rose 24.3% to $39.4 million. Management has also guided for FY27 EBITDA of at least $100 million.

The company finished FY26 with $261.5 million of cash and no debt. SXE currently has a market capitalisation of $1.58 billion, while its forward EV/EBITDA multiple is 11.89, compared with an industry median of 9.46.

Which Is the Better Play?

The comparison ultimately depends on the type of exposure investors want.

NEXTDC is the more direct and scalable AI infrastructure play, with customers signing long-term capacity commitments. SXE, meanwhile, has a broader infrastructure contracting model that allows it to benefit from data centre construction without the same ownership and development requirements.

The Firmus expansion has reinforced the need for electrical systems, power infrastructure, cooling, communications and other specialised construction services.

NXT is the more pure-play opportunity, but its premium valuation and enormous capital requirements deserve close attention. SXE could offer a more balanced risk-reward proposition for investors at current valuation levels.

Source: Company Announcements