Gamuda Bhd's venture into Cloud Space fares well with market analysts who have maintained their BUY call for the group while retaining the target price at RM11.67 with an upside of 22%, according to a research note published by RHB Research Bank Bhd (RHB Research).
Earlier, Gamuda announced that the group has entered into a 50:50 joint venture (JV) with Dagang NeXchange Bhd (DNex) to provide air-gapped Google Distributed Cloud (GDC) services to the Government and private clients in Malaysia. Gamuda also announced that the group is acquiring a 20% stake for RM18 million in Cloud Space, a Google Cloud Premier (GCP) partner which provides solutions and services for Google Cloud, Google Workspace, Chrome Enterprise, and Google for Education to the Malaysian government and the private sector entities.
RHB Research noted that Gamuda's move to enhance its AI capabilities may lead to the creation of a new business segment for digital infrastructure. Such a plan would bode well with the government's RM10 million allocation for the National Artificial Intelligence Office (NAIO)under Budget 2025, which is tasked to drive AI adoption. The icing on the cake would be Gamuda's potential selection to participate in other upcoming digital infrastructure projects by Google, such as data centres.
Meanwhile, MIDF Research has also maintained the BUY call for Gamuda but has revised downward the target price to RM10.68, from RM9.64 previously, awarding only 12% upside based on the market pricing of RM9.53 as at 2:03pm Dec 11.
MIDF Research also noted that Gamuda's entry into a JV deal with DNeX to deliver GDC services and the group's acquisition of 20% stake in Cloud Space are indication that digital infrastructure could become the third core business for Gamuda after construction and property.
Other than its involvement in building data centres, MIDF Research believe the Gamuda's strategic moves related to cloud business will enable the group to ride the growing AI wave. This is evident in plans by global hyperscalers to invest in Malaysia, notably US$2 billion by Google to house its data centre in Malaysia as part of the Google Cloud region.
Gamuda remains analysts' favourite for the construction sector, backed by the group's successful overseas expansion plan and consistency in clinching sizeable jobs at the forefront of most mega projects in Malaysia. As Gamuda continues to tender for traditional infrastructure projects in Australia, it is also pursuing opportunities in RE projects which have gained momentum in Australia.
