Megaport's (ASX:MP1) share price target was upgraded by Citi to AU$22.10 after securing artificial intelligence contracts that are expected to boost earnings "materially," the Australian Financial Review reported Friday.
Citi upgraded its fiscal year 2027 earnings before interest, taxes, depreciation, and amortization (EBITDA) expectations for the company to about AU$255 million.
Additionally, the financial services firm now forecasts fiscal year 2028 EBITDA to reach roughly AU$518 million.
Despite increased risk from a graphics processing unit pool investment with shorter contracts and longer lead times, the economics remained "attractive," with anticipated payback periods of less than 2.5 years, according to analyst Siraj Ahmed.
Megaport shares rose 10% in morning trade on Friday and earlier reached their highest since November 2021.
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