Is AI the Future? Two ASX Stocks That Say Yes

AI isn’t just a buzzword anymore—it’s a build-out. All over the world, companies are scrambling to secure the infrastructure to train and run AI models, while a parallel race pushes intelligence onto devices at the edge. On the ASX, two very different names sit right on these curves: NEXTDC (ASX: NXT), Australia’s premium data centre platform, and BrainChip Holdings (ASX: BRN), a pioneer in neuromorphic AI for ultra–low-power edge computing. One sells megawatts to hyperscalers. The other designs microwatt brains for devices. Together, they show how Australian tech can ride the same AI wave—from the data hall to the handheld.

NEXTDC: Capacity Sells Out First, Revenue Follows

NEXTDC is building the digital backbone for the AI era: high-density, highly connected data centres engineered for GPU-thirsty workloads. The most telling metric isn’t just revenue—it’s contracted utilisation. In AI, the most coveted capacity gets pre-sold years ahead, and NEXTDC’s pipeline is swelling.

1. Historic step-up in demand: Pro forma contracted utilisation jumped by 52MW (30%) to 228MW as at 31 March 2025, with Victoria leading thanks to major AI deployments reserving future halls. The forward order book rose another 45MW (54%) to a record 127MW. Most of these new deals start billing in FY27 and reach full run-rate from FY28, locking in multi-year visibility.
2. Strong first half, stronger runway: In H1 FY25, total revenue reached about $205.5 million, with operating cash flow near $84.9 million—up sharply. Management reaffirmed FY25 guidance for net revenue of $340–350 million and underlying EBITDA of $210–220 million. The message: operating leverage should kick harder from FY26 as today’s order book starts billing.
3. Building ahead of demand: To keep pace with AI reservations, capex was lifted to $1.4–1.6 billion in FY25 to pull forward capacity. Around 70MW is under development and more than 100MW in planning across S3/S4/S5 Sydney, M2/M3/M4 Melbourne, KL1 Kuala Lumpur and AK1 Auckland. This is a scale-up to match the moment.

Why it matters: In AI data centres, demand is spoken for far in advance. NEXTDC’s record contracted utilisation and forward order book don’t just signal interest—they translate into high-visibility, multi-year revenue once new halls energise. With expansion funded and sites staged, the company is positioned to convert reservations into earnings as the AI cycle matures.

What to watch:

1. Conversion of the 127MW forward order book into live billing from FY26–FY28.
2. The pace of additional AI reservations as GPU clusters proliferate.
3. Execution across Sydney/Melbourne builds and new markets (Kuala Lumpur, Auckland), including power delivery and energisation milestones.

BrainChip: Neuromorphic AI Aiming for Real-World Deployments

If NEXTDC is the AI “engine room,” BrainChip is about making AI brains tiny, fast, and power-thrifty. Its Akida neuromorphic IP is designed to process data directly on-device—vision, sound, biosignals—at a fraction of the energy of conventional chips. That’s critical for wearables, satellites, sensors, and anything that can’t rely on the cloud.

1. Commercial progress where it counts: In 1H 2025, BrainChip highlighted collaborations including Onsor Technologies (developing epileptic seizure prediction wearables) and continued work with Frontgrade Gaisler to commercialise a space-grade Akida solution—backed by Sweden’s space agency. The aim: the first neuromorphic SoC for space, where power and reliability are everything.
2. Building revenue—and resilience: First-half FY25 revenue reached roughly $1.61 million, up materially year on year, with net losses narrowing by about 16%. For a platform still early in commercialisation, that’s constructive: engineering validation plus paid progress.
3. Strategic fit in tough environments: Prior agreements with Airbus Defence and Space and projects with Frontgrade extend Akida’s reach into aerospace and defence use cases—harsh, mission-critical domains that demand ultra-low power and deterministic behaviour.
4. Product roadmap with a purpose: The company continues to develop Akida designs, software, and Temporal Event-Based Neural Networks (TENNs) tailored for streaming audio/video and event data. That’s the sweet spot for edge inference across consumer devices, industrial monitoring, and safety-critical systems.

Why it matters: AI isn’t staying “cloud-only.” Hybrid and edge architectures need efficient on-device inference to save bandwidth, cut latency, protect privacy, and run on limited energy. BrainChip’s neuromorphic approach is engineered for that world. Revenues are small today, but design wins and paid pilots can compound quickly if they graduate to volume production.

What to watch:

1. Additional design wins and funded pilots, especially in medical and aerospace where validation cycles translate to durable business.
2. Roadmap execution for Akida and TENNs, including developer adoption and toolchain maturity.
3. IP licensing and silicon shipment updates that expand recurring and product revenue.

Two Paths Up the Same Mountain

Think of the AI stack as a mountain range. NEXTDC is building and leasing out the basecamps—the power-dense data halls where models are trained and refined. BrainChip is crafting the ultra-light gear—chips and IP that push intelligence into the field, where power and latency constraints demand a different kind of brilliance.

What makes the pairing compelling:

1. Different cycles, complementary growth: NEXTDC pre-sells multi-year megawatts and recognises revenue as capacity goes live; BrainChip seeds pilots and partnerships that can scale into long-tail unit volumes.
2. Infrastructure plus intelligence: One captures the capex-heavy wave of AI compute build-outs; the other targets the proliferation of AI into devices, satellites, and sensors.

If AI Is the Future, This Is What It Looks Like

1. For NEXTDC: Watch the conversion of its record 127MW forward order book into billing from FY26 to FY28, fresh reservations, and flawless execution at its Sydney and Melbourne campuses, plus new-region debuts. Visibility is high; delivery is the lever.
2. For BrainChip: Track incremental wins where low power really matters—medical wearables, defence, space—and proof that paid pilots become production ramps. The technology cases are clear; the race is to scale them.

The Upshot

AI is no longer a promise—it’s a pipeline. NEXTDC shows how that pipeline gets built and monetised, selling out capacity before it’s powered on. BrainChip shows how the pipeline reaches the edge, turning microwatts into meaningful intelligence. One name gives exposure to hyperscale infrastructure; the other to on-device innovation. If the next decade belongs to AI, these two ASX stocks offer a distinctly Australian way to participate—from the humming data hall to the sensor on a wrist or in orbit.

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