How Microsoft’s new Xbox could spur ASX data centre shares

As demand for data continues to grow exponentially, so too does the demand for secure places to store it.
The post How Microsoft’s new Xbox could spur ASX data centre shares appeared first on The Motley Fool Australia. –

ASX data centre shares have been receiving more media attention as the growth in global cloud computing shows no signs of easing.

Cloud computing, if you’re unfamiliar, involves storing and processing data outside of your own computer hardware. The cloud, then, simply entails vast server networks located in data centres.

ASX data centre shares have benefited from multiple years of growth in cloud computing. And with the onset of the global pandemic, which drove a huge shift to working, socialising and shopping from home, that growth has only sped up.

According to the Australian Bureau of Statistics (ABS) Characteristics of Australian Business report, released earlier this month, 55% of Australian businesses are now leveraging paid cloud computing. Just 5 years ago, in 2015–2016, that figure was only 31%.

Now one of the world’s biggest companies, Microsoft Corporation (NASDAQ: MSFT), is aiming to take its Xbox game consoles to the clouds.

Gaming in the cloud

As reported by the Australian Financial Review, the prototype Xbox console, “which forms the basis of Microsoft’s ‘xCloud’ strategy, has no hand-held controllers, no Blu-ray drive, and doesn’t plug into your TV.”

The prototype, which operates on something known as a ‘blade’, runs in Microsoft’s own Azure data centres. It’s already been released in the United States and is currently being beta-tested Down Under.

According to Phil Spencer, executive vice-president in charge of Microsoft’s Xbox gaming business:

When I think about reaching the 3 billion people who play video games today, our ability to deliver AAA games to any screen that someone already owns has to be the place we will find the most customers… We might end up with more consoles in data centres than we do in people’s homes.

While Microsoft is deploying the xCloud prototypes in its Azure data centres, the trend highlights the growth potential for leading ASX data centre shares.

2 leading ASX data centre shares

There are 2 ASX data centre related shares listed on the S&P/ASX 200 Index (ASX: XJO).

First up we have Nextdc Ltd (ASX: NXT) with a market cap of $5.4 billion.

The Nextdc share price, up 1% in intraday trading, has gained 31% over the past 12 months. That compares to a 29% gain posted by the ASX 200. Year-to-date Nextdc shares have come under pressure, down 3%.

Next up is Megaport Ltd (ASX: MP1), a software-defined network service provider which enables enterprise customers to connect between data centres, with a market cap of $2.5 billion.

The Megaport share price is up 1% in afternoon trade and has gained 17% over the past 12 months. Megaport shares are up 15% so far in 2021.

The post How Microsoft’s new Xbox could spur ASX data centre shares appeared first on The Motley Fool Australia.

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 more than eight 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. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

The secrets to investing in international shares: fund manager

3 exciting ASX growth shares rated as buys

Is WAM going ham on Magellan High Conviction Trust (ASX:MHH)?
3 ASX shares for buy and hold investors to check out

3 top tech stocks to buy during a recession

Bernd Struben has no position in any of the stocks mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MEGAPORT FPO and Microsoft. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!