Now could be the time to snap up Nextdc Ltd (ASX: NXT) shares.

That's the view of analysts at Goldman Sachs, which see potential for this ASX 200 stock to generate big returns.

What is the broker saying about this ASX 200 stock?

Goldman notes that the data centre operator delivered a half year result that was largely in line with expectations during the first half. It said:

NXT reported 1H25 net revenue/Underlying EBITDA that was -0%/-1% vs GSe. FY25 guidance was re-affirmed across all metrics, inline with our expectations.

In respect to positives from the result, the broker named two. Goldman said:

(1) Contract outlook robust, with NXT progressing planning on 50MW+ at M3, 20MW+ at M2 and 12MW in S3. Combined with the positive pipeline commentary – i.e. underlying cloud demand hasn't slowed, or changed, with current pipeline very heavily cloud skewed – this suggests to us that near-term contracts are likely, particularly in Melbourne (we forecast 50MW in 2H25); (2) Longer term NXT re-iterated its views that recent improvements in AI models are a positive for the company, as it will accelerate timeline to inference demand, which it will be a greater beneficiary from.

There were a couple of negatives, though. One was the company's yields were softer than expected and a bumper $150 million management incentive package impacts its future earnings estimates. The broker explains:

(1) Net revenue per MW declined (sequentially & vs. pcp), partly reflecting timing of billing MW coming on-line, but also mix dilution from hyperscale, alongside a slowdown in interconnection revenue growth to +7% – we lower our yield assumptions -1% to -3% through FY25-27E; (2) Introduction of $150mn (face value) growth incentive plan for senior leadership team, although requiring a material 5Y share price appreciation A$26.17 (hurdle) to $32.52 (full vesting) to achieve, is reflecting of the intense competition within the sector for staff, and negatively impacts our earnings.

Time to buy

In response to the result, Goldman has reaffirmed its buy rating on the ASX 200 stock with a trimmed price target of $17.10.

Based on the current NextDC share price of $14.15, this implies potential upside of 21% for investors over the next 12 months. It said:

We believe the company has a compelling growth profile and a proven and profitable business model, noting it trades on a growth-adjusted discount vs. peers, which we view as unjustified.