Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
X2M Shares Jump 25% as Second Queensland Data Centre Deal Takes Capacity to 20MW
Highlights
X2M Connect Limited (ASX: X2M) shares rose 25% to AU$0.005 today after the company announced an agreement for a proposed 10MW AI-enabled data centre in regional Queensland. The new X2M data centre deal is its second, lifting total capacity across both agreements to 20MW and aggregate estimated project costs above AU$500 million.
One thing to keep in mind about that 25%. At half a cent, the smallest price step on the ASX is a tenth of a cent, so a single tick from AU$0.004 to AU$0.005 shows up as a 25% move. The headline gain is real, but it reflects one tick.
What X2M Announced
The proposed Queensland facility carries an estimated project cost of AU$250 million.
X2M now holds binding exclusivity over the site and its associated power capacity for 60 days. Commercial terms are still being negotiated, and the company is targeting definitive binding agreements within 90 days. So the deal is locked up against competing bidders, but the economics haven’t been settled yet.
Why the Power Setup Matters
Power is usually the hardest part of a data centre project, not the buildings. Here, the site already holds local government development approval and a 2.5MW grid connection. X2M plans to use that existing supply for the first stage.
The other 7.5MW is meant to come from renewable generation built on-site by the developer, backed by a power purchase agreement and expected to be available by the end of 2028. Read plainly, the full 10MW depends on that second leg arriving on time. Until then, stage one runs on a quarter of the planned capacity.
X2M’s own platform would manage energy use, cooling and environmental systems across the facility, which ties the project back to the company’s existing software business.
How X2M Expects to Make Money
X2M isn’t proposing to own the facility outright. Through its Managed Delivery business, it intends to coordinate design, engineering, equipment supply, installation and commissioning, drawing on its computing and graphics processing unit (GPU) partnerships.
The company expects three income streams:
The final scope and financial terms haven’t been agreed, so none of these can be sized yet.
What to Watch Next for X2M
X2M says its prospective data centre pipeline exceeds 200MW, with most identified sites in Queensland. That figure includes non-binding opportunities, so it should be read as a list of possibilities rather than committed projects. Only 20MW is currently under agreement.
The near-term checkpoints are the 60-day exclusivity window and the 90-day target for binding agreements. Whether the company can convert this deal, and then more of the pipeline, into signed contracts will say more about the strategy than today’s price move.
X2M also continues to run its smart city business, which supplies connected-device technology and software services to utility and government customers.
Note- All data presented is based on information available at the time of writing.
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