Gamuda's deal with Google affiliate boosts analysts' confidence in its data centre strategy and job pipeline

• MIDF Research said Gamuda's current order book had hit a record high of RM37 billion, with RM15.5 billion worth of new projects secured so far in FY2025 (August 2024-May 2025). 

KUALA LUMPUR (May 6): Gamuda Bhd’s (KL:GAMUDA) recent deal with Google-linked Pearl Computing Malaysia Sdn Bhd has strengthened analysts' confidence that its data centre strategy is working and remains unaffected by US artificial intelligence policies or global tensions.

CIMB Securities said in a note Gamuda is well placed to win upcoming data centre projects at the Springhill Industrial Park, and also Google's planned sites at the Elmina Business Park and Eco Business Park. 

The research house said, with nine data centre teams and advanced building systems, Gamuda is ready for large-scale data centre jobs and offers full solutions from land development to utilities, helping speed up construction and reduce costs and risks.

On Monday, Gamuda announced that it will sell 389 acres in Springhill for RM455 million and carry out RM1 billion worth of enabling works on the site. Analysts said this project could increase Gamuda’s order book by 3% to RM37 billion.

Kenanga Research in a note said while the land disposal itself may not yield significant profits, it positions Gamuda to capitalise on future data centre projects on the site.

It said the land can support data centres of 800 to 1,000 megawatt, with potential contracts worth RM14 billion to RM20 billion. If Gamuda secures half, it could win RM3.5 billion to RM5 billion in annual data centre jobs, above the current RM3 billion forecast. 

The research house said each extra RM1 billion in contracts could boost Gamuda's earnings for the financial year ending July 31, 2026 (FY2026) by 2.2%, and raise the stock’s target price by seven sen to RM4.97.

Hong Leong Investment Bank Research supports the outlook, saying Gamuda’s strong strategy positions it well for future data centre projects. Earthworks are set to finish by the third quarter of 2025, keeping data centre contracts on track for this year.

The firm did not change its projections for the company to factor in more data centre jobs due to AI-related uncertainties. It did, however, highlight Gamuda’s strengths: a solid order book, focused data centre strategy, and growing role in Australia’s renewable energy sector.

MIDF Research said Gamuda's current order book had hit a record high of RM37 billion, with RM15.5 billion worth of new projects secured so far in FY2025 (August 2024-May 2025). 

The company is targeting around RM35 billion in additional projects that it expects to have a high chance of winning. These jobs include the Sabah water supply project (RM4 billion) and additional work for the Penang Light Rail Transit (RM3 billion).

Analysts are bullish on Gamuda, with 19 out of 21 research firms giving it a 'buy' rating. The average 12-month target price is RM5.39, suggesting a potential return of 23.9%.

Gamuda shares were down 0.68% to RM4.35 at Tuesday's noon break, giving the company a market capitalisation of RM25.1 billion. Its share price is down 8.23% so far this year.

Want to have a more personalised and easier house hunting experience? Get the EdgeProp Malaysia App now.