Why GDS Holdings (GDS) Is Up After Profitable Q3 and Landmark China Data Center REIT IPO

• GDS Holdings reported third-quarter 2025 results on November 19, showing a return to profitability with net income of RMB 726 million and a 10.2% year-over-year increase in revenue to RMB 2.89 billion, driven by strong demand for data center services.
• An interesting highlight is that the company completed its China data center REIT IPO during the quarter, providing additional capital flexibility for ongoing expansion as AI infrastructure demand continues to accelerate in China.
• We'll examine how GDS Holdings' profitable quarter and REIT IPO impact its investment narrative amid rising AI-driven data center demand.

The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

GDS Holdings Investment Narrative Recap

To be a shareholder in GDS Holdings right now, you need to believe that accelerating demand for AI-powered data centers in China will continue translating into top-line growth and improved profitability, even as the company confronts pricing pressure and rising capital needs. While GDS's return to profitability and its completed China REIT IPO increase short-term financial flexibility, they do not fully resolve the company’s reliance on ongoing asset sales to fund growth, which remains the top short-term catalyst but also a key risk if market appetite weakens.

Among the recent announcements, GDS’s confirmation of its full-year 2025 revenue guidance (RMB 11,290 million to RMB 11,590 million) stands out. This affirmed outlook signals management’s confidence in underlying demand and internal execution, despite recent volatility in data center pricing and headwinds surrounding capital markets for asset monetization.

In contrast, investors should be aware that GDS’s sustained dependence on asset monetization for expansion could create challenges if capital market conditions shift...

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 a CN¥457 million earnings increase from CN¥277.2 million.

Uncover how GDS Holdings' forecasts yield a $48.21 fair value, a 62% upside to its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community estimate GDS's fair value between CN¥5.8 and CN¥61.83 per share. Opinions vary widely, while ongoing reliance on asset sales to fund growth remains a crucial consideration for future performance.

Explore 4 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 3 key rewards and 2 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.

Ready To Venture Into Other Investment Styles?

Every day counts. These free picks are already gaining attention. See them before the crowd does:

• Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 37 best rare earth metal stocks of the very few that mine this essential strategic resource.
• This technology could replace computers: discover 26 stocks that are working to make quantum computing a reality.
• We've found 15 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com