Analyst Daley Li from Bank of America Securities reiterated a Buy rating on VNET Group, Inc. Sponsored ADR (VNET – Research Report) and decreased the price target to $11.30 from $13.80.
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Daley Li’s rating is based on VNET Group, Inc.’s strong financial performance and growth prospects. The company reported a significant year-over-year increase in both revenue and adjusted EBITDA for the first quarter of 2025, with revenue growing by 18% and adjusted EBITDA by 26%. This performance exceeded market expectations and demonstrated the company’s robust operational capabilities.
Moreover, VNET’s wholesale internet data center (IDC) business is experiencing rapid growth, with a notable 87% year-over-year increase in revenue. The management’s strategy to expand wholesale capacity and secure new orders, particularly from sectors with high AI demand, indicates a positive outlook for future growth. Despite challenges such as US chip restrictions, the company’s ability to maintain a steady move-in pace for large wholesale customers further supports the Buy rating. Additionally, the retail IDC segment is also showing steady growth, driven by rising demand for AI-related services, which bodes well for the company’s overall revenue trajectory.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $15.81 price target.
VNET’s price has also changed moderately for the past six months – from $3.860 to $5.390, which is a 39.64% increase.