With the rise of artificial intelligence (AI), digital infrastructure has become the backbone of modern economies — and it is a trend that's accelerating fast.

For investors hunting for the next big growth story on the ASX, one AI stock is quietly positioning itself at the centre of this shift: Megaport Ltd (ASX: MP1).

Megaport may not be a household name, but its role in the digital economy is vital.

The company provides scalable, on-demand network connectivity services, allowing businesses to tap into cloud providers and data centres around the world — all via a few clicks. And now, thanks to the growing demand for AI workloads, this stock's global platform could be about to hit the fast lane.

Why AI could supercharge Megaport

AI applications are not just computationally intensive — they require flexible, high-performance networks to shift massive volumes of data between compute environments.

That's exactly the kind of problem Megaport is built to solve. With more than 930 enabled locations worldwide and deep integrations across cloud platforms and data centres, Megaport is becoming the digital superhighway for businesses deploying AI tools.

In fact, the AI stock recently launched AI Exchange (AIx), a platform connecting customers with over 30 AI service providers. It is a powerful addition to Megaport's growing ecosystem, which also includes a Financial Services Exchange (FSx) and a global footprint.

Strong momentum behind the scenes

Megaport's numbers back the story. In the first half of FY 2025, the AI stock posted a record annual recurring revenue (ARR) of $226.6 million. This was up 18% year over year. Revenue rose 12% to $106.8 million, while net cash flow climbed to $15.7 million.

Another positive was that Megaport maintained a solid 70% gross margin, highlighting its operating leverage.

Looking ahead, new product launches, including 100G virtual cross connects and a high-speed compute platform, are designed to meet future digital infrastructure needs — especially in AI-heavy industries.

Bullish broker

The team at Morgans believes that Megaport could be destined for big things. It recently said:

Traditional telecommunications companies will benefit from the astronomical growth of data around AI. Telstra for instance is building a specialist inter-capital network with a A$1.5bn capital budget to fund this project. However, our preferred exposure is through the more specialised and capital-light Megaport.

Megaport is a global cloud connection network and the leading Network as a Service provider. It operates the largest data centre connection business in the world, connecting to 850 data centres through a fully automated, on-demand telco network. We think it is uniquely placed to help business move data globally and benefit from the growth of data related to both cloud computing and AI.

Morgans currently has an accumulate rating and $15.50 price target on the AI stock. This implies potential upside of 20% for investors over the next 12 months.