Megaport shares are up more than 100% in 3 months. Are they still a buy?

Shares in cloud computing company Megaport Ltd (ASX: MP1) have performed well over the past few months, more than doubling in value after being heavily sold off.

While the shares have performed well over the short term, they're up a more modest but still impressive 37.9% over the past 12 months.

This begs the question, are Megaport shares still good value at the current price?

What's been moving Megaport shares?

This is complicated somewhat by the fact that there hasn't been a great deal of news flow from the company in recent months.

The most recent ASX releases of note relate to the company raising $827 million in new capital at a price of $14.30 per share.

Given the company's share price now sits at $20.18, shareholders who took part in the entitlement offer are already sitting on some healthy gains.

Megaport did also announce some new contracts in June worth about $458.9 million.

The company said as a result, it would establish an on-demand GPU pool supported by $350 million in investment, "providing enterprise customers with access to AI infrastructure through both contracted and consumption-based commercial models''.

The company added:

Newly secured contracts and creation of the GPU Pool form the foundation of Megaport's strategy to establish a Globally-Distributed AI Inference Cloud leveraging its footprint of more than 1,100 connected data centres across 31 countries.

Megaport Chief Executive Officer Michael Reid said:

AI inference represents one of the biggest infrastructure opportunities of the next decade The contracts announced today reflect the accelerating demand for globally-distributed AI inference infrastructure. Megaport's software-provisioned compute, network, and storage platform positions us strongly to meet that demand.

Broker says Megaport shares looking cheap

In relation to Megaport's current valuation, UBS issued a new research note this week, using CoreWeave's results as a benchmark.

The US company's revenue more than doubled to US$2.58 billion, beating analyst expectations, while the backlog of contracts signed but not yet delivered reached a massive US$104 billion.

UBS said the earnings and an associated investor call indicated strong demand dynamics for Megaport's Latitude business.  

UBS added:

Comments made on the call are positive on both demand and recontracting, especially extracting better returns from extending life of older gear. Comments also showed evidence of achieving better rates at higher margins, even with increased competition.

UBS has a price target of $24.20 for Megaport shares. The company is valued at $4.7 billion.

The post Megaport shares are up more than 100% in 3 months. Are they still a buy? appeared first on The Motley Fool Australia.

Motley Fool contributor Cameron England has positions in Megaport. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2026