Guess which ASX All Ords share is raising $1.1 billion to back generative AI
A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
The All Ordinaries Index (ASX: XAO) is down 0.5% on Monday morning, but this ASX All Ords share isn't making any moves just yet.
Shares in the New Zealand based company infrastructure investment company entered a trading halt before the opening bell this morning at the company's request.
This came on the heels of a major AI related capital raise announcement earlier this morning.
Any guesses?
If you said Infratil Ltd (ASX: IFT), go to the head of the virtual class.
Here's what's happening.
ASX All Ords share tips hat for $1.1 billion
Infratil said it intends to raise NZ$1.15 billion (approximately AU$1.1 billion) to fund data centre operator CDC's accelerating growth. The new funds will also be used to provide more flexibility for growth across the ASX All Ords shares' global portfolio.
The equity raising comprises an underwritten1 NZ$1.0 billion placement of new IFT shares and a NZ$150 million non-underwritten retail offer of new IFT shares.
New shares will be issued for NZ$10.15 apiece. That's 6.8% below Friday's closing price.
"CDC continues to see a surge in demand for data centre capacity," Infratil CEO Jason Boyes said. "Demand continues to accelerate on the back of cloud adoption and significant investments in generative AI."
He noted that CDC has been one of Infratil's top investments. The ASX All Ords share's stake in CDC is valued at NZ$4.42 billion. That's 10 times what the company first invested in 2016.
According to Boyes:
This rapid increase in demand has seen CDC enter advanced negotiations with customers for over 400MW of capacity at multiple sites across the CDC footprint with this capacity expected to come online over the next four to five years.
CDC expects at least 200MW of capacity to commence construction over the next 12 months. And Infratil said it expects to commit equity funding of around AU$600 million to the data centre developer over the next two years.
"CDC's growth has accelerated considerably recently, driven by rapid growth in AI-driven data demand," Boyes said.
CDC CEO Greg Boorer added:
We are seeing an unprecedented increase in the number of customer discussions, many of which are tied to AI-related workloads. CDC has been AI-ready for more than 15 years and is well positioned to capture strong share of AI-driven demand.
Infratil said there was no change to its FY 2025 guidance.
Infratril share price snapshot
If you look back at the chart up top, you'll notice a remarkably stable long-term uptrend in the Infratil share price.
Over the past 12 months, the ASX All Ords share has gained 14.3%.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...
See The 5 Stocks *Returns as of 5 May 2024
More reading
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.