Goldman’s AI Data Center Upgrade Might Change The Case For Investing In GDS Holdings (GDS)

• Earlier this week, Goldman Sachs upgraded the cloud and data center sub-sector to a top pick and highlighted GDS Holdings as a favored company, citing expected ongoing demand from AI training and inference workloads.
• This endorsement places GDS at the center of investor attention within AI-related infrastructure, potentially amplifying how the market views its long-term data center expansion and financing plans.
• We’ll now explore how Goldman Sachs’s upbeat AI-driven sector view could influence GDS Holdings’ existing investment narrative and perceived growth drivers.

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GDS Holdings Investment Narrative Recap

To own GDS Holdings, you need to believe hyperscale and AI data center demand will support long-term capacity growth despite pricing pressure and high leverage. Goldman Sachs’s sector upgrade reinforces the AI-driven demand story, but it does not fundamentally change the key near-term catalyst, which is GDS’s ability to secure and monetize large AI workloads while managing financing needs. The biggest immediate risk remains its reliance on capital markets to fund heavy expansion and refinance debt.

The Q3 2025 results, where GDS reported CNY 2,887.13 million in revenue and CNY 725.98 million in net income, are particularly relevant here, as they show how earnings can be influenced by one-off items while the company continues to pursue aggressive growth. This backdrop matters when investors weigh the AI demand narrative against persistent concerns about leverage, asset monetization and the sustainability of reported profitability.

Yet behind the AI growth story, investors should also be aware of the company’s ongoing dependence on asset monetization and refinancing...

Read the full narrative on GDS Holdings (it's free!)

GDS Holdings' narrative projects CN¥16.2 billion revenue and CN¥734.2 million earnings by 2028. This requires 14.1% yearly revenue growth and about CN¥457 million earnings increase from CN¥277.2 million today.

Uncover how GDS Holdings' forecasts yield a $48.21 fair value, a 35% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community span roughly US$5.80 to about US$61.83 per share, showing how far apart individual views can be. Set against that, the reliance on ongoing asset monetization to fund GDS’s ambitious AI data center buildout raises important questions about how different outcomes for capital markets could affect the business, so it is worth comparing several of these perspectives before deciding how you see the stock.

Explore 5 other fair value estimates on GDS Holdings - why the stock might be worth less than half the current price!

Build Your Own GDS Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your GDS Holdings research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free GDS Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate GDS Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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