Megaport Ltd (ASX: MP1) shares are ending the week deep in the red.

At the time of writing, the network as a service provider's shares are down 14% to $7.20.

Why are Megaport shares sinking?

Today's decline has been driven by the release of an update before the company's annual general meeting.

Before getting into the update, let's take a look at some of the things that management said in its presentation.

As shareholders will be aware, Megaport stands to benefit greatly from the artificial intelligence (AI) megatrend.

The company's CEO, Michael Reid, spoke about its exposure to AI in his address. He said:

Our customers keep evolving and accelerating, and so do we. AI and cloud demand continues to drive data centre growth at an unprecedented pace, and hybrid and multicloud adoption has become the norm, with customers mixing and matching between the hyperscalers and niche cloud and GPUasS providers for their specific needs. It's clear: the world needs more and more connectivity and Megaport is perfectly positioned as a global leader to capitalise on this growth.

Reid also revealed that the company's technology is now in over 930 data centres across 26 countries. He adds:

More than a decade in, Megaport is still leading the way. Our ecosystem and global footprint continues to grow, with 930+ enabled locations and a presence in 26 countries, having recently launched in Italy and Brazil. It's all thanks to the incredible dedication from the Megaport team; I can't thank them enough for their passion and hard work.

Without further ado, let's now look at how the ASX 200 tech stock is performing in FY 2025.

Trading update

Management revealed that it is performing in line with expectations so far this year.

As a result, it has reaffirmed its guidance for FY 2025. It expects FY 2025 revenue of $214 million to $222 million. This represents a 9.6% to 13.7% year on year increase.

However, it seems that the market was pricing in an upgrade to this guidance. And with no upgrade coming today, investors have been quick to sell down Megaport's shares.

In addition, management highlights that "early trends are indicative of a continuation of this revenue growth trajectory into FY26." Once again, it seems that the market is disappointed that Megaport's growth won't accelerate in FY 2026.

Megaport also revealed that it continues to expect its EBITDA to be in the range of $57 million to $65 million for the 12 months. This implies flat EBITDA growth to 14% growth year on year.

Overall, not the sort of growth that the market is used to from this stock nor what is implied in its valuation.