KUALA LUMPUR: Gamuda Bhd's move to enhance its artificial intelligence (AI) capabilities may lead to the creation of a new business segment for digital infrastructure, said RHB Research.
The research house said such a plan would bode well with the government's RM10 million allocation for the National Artificial Intelligence Office under Budget 2025, which is tasked to drive AI adoption.
"The icing on the cake would be if Gamuda is selected to participate in other upcoming digital infrastructure projects by Google, such as data centres," it said in a note.
Gamuda has entered into a 50:50 joint venture (JV) with Dagang NeXchange (DNEX) to provide air-gapped Google Distributed Cloud (GDC) services to thegovernment and private clients in Malaysia.
Gamuda also announced that it is acquiring a 20 per cent 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.
RHB Research said the JV will act as a sole provider of GDC services, which is a fully managed cloud experience for organisations that require complete isolationto meet stringent sovereignty and regulatory requirements.
"The JV will also be the first local provider of air-gapped GDC services covering the procurement of GDC hardware, providing customised Artificial Intelligence(AI) solutions, applications development, ongoing client support, data migration, and infrastructure maintenance for clients," it said.
Moving forward, RHB Research said there will be no changes to its earnings estimates, pending further clarity from management's briefing tomorrow.
"Gamuda's digitalisation venture may require time before it can materially contribute to its bottomline. Keep Buy with a target price of RM11.67," it added.
Public Investment Bank Bhd in its research report said it views the development positively, but has kept its forecasts unchanged for now, pending further details from management regarding the expansion of its digital infrastructure business.
It retained its "Outperform" call with a higher target price of RM10.40 thanks to its construction segment, given encouraging orderbook replenishment prospect, boosted by technology services market, and a record geographically diversified order book, estimated at RM31.4 billion.