GDS Holdings: Strong Growth Potential and International Expansion Drive Buy Rating

Analyst Daley Li of Bank of America Securities maintained a Buy rating on GDS Holdings (GDS – Research Report), reducing the price target to $42.50.

Daley Li has given his Buy rating due to a combination of factors that highlight GDS Holdings’ strong performance and growth potential. The company reported a 12% year-over-year increase in revenue for the first quarter of 2025, driven by a significant expansion in utilized area within China, despite a slight decline in monthly service revenue. The management’s ability to maintain their full-year guidance, even with the deconsolidation of certain data center projects, underscores their confidence in continued top-line growth.
Furthermore, GDS Holdings’ international business, particularly through its DayOne segment, showed impressive growth with a 140% year-over-year revenue increase. The segment secured substantial new orders in both existing and new markets, such as Thailand and Finland, indicating a robust expansion strategy. The improved utilization rates and strong order book, along with a high-single-digit projected growth in adjusted EBITDA for the remainder of the year, support Daley Li’s positive outlook and Buy rating for the stock.

Li covers the Technology sector, focusing on stocks such as GDS Holdings, VNET Group, Inc. Sponsored ADR, and Agora. According to TipRanks, Li has an average return of 83.7% and a 52.17% success rate on recommended stocks.

In another report released on May 5, Nomura also initiated coverage with a Buy rating on the stock with a $35.80 price target.