GDS Holdings downgraded to Hold from Buy at Jefferies

Jefferies downgraded GDS Holdings (GDS) to Hold from Buy with a price target of $45, up from $27.06. Based on Alibaba’s (BABA) capex guidance, China’s cloud service provider capex to revenue will rapidly rise from less than 10% to 15%-plus, matching their U.S. peers, the analyst tells investors. However, since the January 20 announcement of DeepSeek R1, GDS has risen 95%, or added $4B in market cap, notes the analyst, whose bullish view on GDS has played out so the firm sees a more balanced risk-reward in the near term.