PenderFund Capital: Nextpower ($NXT) Investment Case

In the Pender US Small/Mid Cap Equity Fund’s August 2026 commentary, portfolio manager Aman Budhwar discloses a new position in Nextpower Inc. ($NXT). The purchase sits inside a broader thesis: Pender argues US small and mid-caps reached an earnings turning point in August, with two-year forward EPS growth for the S&P MidCap 400 rising from just over 5% at the Fund’s December 2024 launch to roughly 18%, and the Fund’s own holdings improving from approximately 10% to 22%.

Why the Fund Bought It

• Pender describes Nextpower as a utility-scale solar and energy technology provider that has expanded from solar trackers into electrical infrastructure, power conversion, software and services
• The firm believes recent share-price weakness created an attractive entry point
• According to Pender, the market has focused on near-term margin pressure from investments in the newer business lines, which the firm instead views as supporting future growth

Electrical Infrastructure Opportunity

• Pender sees particular opportunity in electrical infrastructure, where the firm believes US restrictions on certain foreign-produced power equipment could benefit domestic suppliers
• Management expects electrical revenue to grow from $59 million in FY2026 to approximately $530 million by FY2030

Balance Sheet

• The firm notes more than $1.2 billion of cash and no debt at the end of the June quarter, alongside strong cash generation
• Pender believes this positions Nextpower to fund its expansion internally

Portfolio Context

• Pender frames the AI buildout as creating demand for suppliers of the physical infrastructure required to build and operate data centres
• The firm says it has sought exposure to potential bottlenecks including power, cooling, networking equipment and data centre construction
• Pender notes some higher-growth holdings have seen share-price weakness as longer-term rates have risen, and says it views such valuation-driven pullbacks as opportunities to add where the long-term thesis remains intact

Pender views Nextpower as a way to participate in the continued buildout of US power infrastructure, with the firm believing the market is discounting investment-driven margin pressure that it sees as funding a materially larger electrical business by the end of the decade.

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