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Megaport Benefits From Rising Demand in AI Inference, Says Jefferies

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Megaport (ASX:MP1) is riding the artificial intelligence (AI) boom, especially increased workloads in AI Inference, Jefferies said in a note on Wednesday.

The company has won four new AI infrastructure contracts worth roughly AU$458.9 million in total. Jefferies expects the contracts to bring in a 21% annualized return on investment over six years.

The investment firm said Megaport's "competitive advantage" lies in its ability to distribute graphics processing units across several data centers and connect them through its network platform.

Analysts at the brokerage expect the company's Network business to benefit from growth in AI Inference and agentic workloads, as customers need fast, low-latency, high-performance connections to access computing power across multiple data centers.

Jefferies maintained a buy rating and raised its price target to AU$19 from AU$18.40.

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