GDS Holdings (GDS) AI Stock Analysis

• Market Cap: $8.85B
• Dividend Yield: N/A
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 76.0
• Beta (1Y): 1.43
• Revenue Growth: 1.95%
• EPS Growth: N/A
• Country: US
• Employees: 2,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.46
• Shares Outstanding: 200,928,820
• 10 Day Avg. Volume: 2,700,022
• 30 Day Avg. Volume: 1,623,547
• PEG Ratio: -0.12
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 3.08
• P/FCF Ratio: -24.18
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 5.67
• Enterprise Value/Ebitda: 2.43
• 1Y Price Target: $48.98
• Price Target Upside: 11.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.02
• Revenue Forecast (FY): $1.82B

• Rating: 59 Neutral
• Price Target: $44.00 ▲(0.14% Upside)

The score is driven primarily by mixed financial fundamentals—strong margins and ROE but pressured by high leverage and weak cash flow. Technicals are supportive due to a clear uptrend, though overbought signals add near-term risk. Valuation is a notable headwind given the very high P/E. Earnings-call guidance and AI-driven demand provide a meaningful positive offset.

Positive Factors

High profitability & ROE

Sustained high net and EBIT margins with 20% ROE indicate the core colocation and managed services business generates strong operating returns. Durable margins support reinvestment and keep unit economics attractive across multi-year data center builds.

AI-driven bookings & pipeline

A majority of bookings tied to AI infrastructure is a structural demand shift. High-density, AI-focused customers raise long-term capacity utilization and justify specialized capex, providing multi-quarter visibility via backlog and supporting sustained revenue growth.

Asset monetization via C-REIT

Successful C-REIT issuance creates a durable non-debt funding channel to monetize assets, recycle capital, and fund expansion. Strong aftermarket pricing improves access to low-cost capital and reduces reliance on incremental debt for capacity growth.

Negative Factors

High leverage

Elevated leverage constrains financial flexibility in a capital-intensive industry. With substantial debt on the balance sheet, GDS faces higher refinancing and interest risk, limiting its ability to absorb cyclical slowdowns or accelerate capex without external funding.

Weak cash generation

Negative FCF conversion and low operating cash versus earnings show profits are not reliably producing cash. That undermines internal funding for expansion or debt reduction and increases dependence on asset sales or capital markets to finance growth.

Revenue & pricing pressure

Guidance for mid-single-digit downward price resets and reports of subdued new bookings signal structural pressure on revenue per rack. Pricing resets plus elevated move-in volumes could compress margins and slow revenue growth over the next several quarters.

GDS Holdings Business Overview & Revenue Model

Company Description

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. The company was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes Money

GDS Holdings generates revenue primarily through colocation services, wherein customers rent space, power, and cooling for their servers within GDS's data centers. This constitutes a significant portion of their revenue model. Additionally, GDS earns income from managed services, which include IT support and infrastructure management. The company also benefits from interconnection services that facilitate connectivity between customers and their partners. Strategic partnerships with major cloud providers and technology firms enhance GDS's market positioning, providing additional growth opportunities. The increasing demand for digital transformation and cloud services in China further fuels GDS's revenue streams, contributing to its overall financial performance.

GDS Holdings Financial Statement Overview

Summary

GDS Holdings demonstrates strong profitability with a high net profit margin and return on equity. However, the company faces challenges with declining revenue growth and high leverage. Cash flow management is a concern, with negative free cash flow growth and low cash flow ratios. The company needs to address revenue growth and leverage to improve its financial health.

Income Statement

GDS Holdings shows a strong net profit margin of 41.56% in TTM, indicating high profitability. However, the revenue growth rate is negative, suggesting a decline in sales. The gross profit margin is moderate at 22.77%, and the EBIT margin is healthy at 21.58%. Overall, while profitability is strong, the declining revenue growth is a concern.

Balance Sheet

The debt-to-equity ratio is high at 1.88, indicating significant leverage, which poses a risk. Return on equity is strong at 20.16% in TTM, reflecting efficient use of equity. However, the equity ratio is moderate, suggesting a balanced asset structure. The high leverage is a potential risk despite strong ROE.

Cash Flow

The free cash flow growth rate is negative, and free cash flow to net income ratio is -0.73, indicating cash flow challenges. Operating cash flow to net income ratio is low at 0.36, suggesting limited cash generation relative to net income. Overall, cash flow management appears weak, with negative free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.20B	10.32B	9.96B	9.33B	7.82B	5.74B
Gross Profit	2.55B	2.22B	1.92B	1.94B	1.78B	1.55B
EBITDA	5.97B	4.51B	1.36B	4.19B	3.23B	2.33B
Net Income	5.61B	3.43B	-4.29B	-1.27B	-1.19B	-669.21M
Balance Sheet
Total Assets	78.61B	73.65B	74.45B	74.81B	71.63B	57.26B
Cash, Cash Equivalents and Short-Term Investments	13.44B	7.87B	7.71B	8.61B	9.97B	16.26B
Total Debt	46.96B	44.46B	47.99B	44.68B	37.79B	24.63B
Total Liabilities	51.83B	49.98B	54.32B	50.63B	47.10B	31.69B
Stockholders Equity	26.67B	23.54B	19.96B	24.07B	24.47B	25.57B
Cash Flow
Free Cash Flow	-766.33M	-1.32B	-4.19B	-4.95B	-8.50B	-7.70B
Operating Cash Flow	3.31B	1.94B	2.07B	2.86B	1.20B	320.89M
Investing Cash Flow	-3.68B	-8.76B	-6.33B	-11.27B	-13.69B	-9.38B
Financing Cash Flow	14.26B	17.06B	3.14B	4.86B	8.12B	20.14B

GDS Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDS, the sentiment is Positive. The current price of 43.94 is above the 20-day moving average (MA) of 37.89, above the 50-day MA of 35.15, and above the 200-day MA of 32.31, indicating a bullish trend. The MACD of 2.30 indicates Negative momentum. The RSI at 68.16 is Neutral, neither overbought nor oversold. The STOCH value of 73.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GDS.

GDS Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KD	64 Neutral	$6.29B	15.94	35.51%	―	-1.90%	―
VNET	63 Neutral	$3.21B	-39.26	-9.19%	―	20.09%	86.04%
DXC	62 Neutral	$2.67B	7.33	12.33%	―	-4.13%	2143.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDS	59 Neutral	$8.85B	75.95	5.25%	―	1.95%	―
CNDT	47 Neutral	$310.37M	-2.08	-15.87%	―	-12.45%	-142.77%

GDS Holdings Corporate Events

GDS-Backed DayOne Data Centers Secures Over US$2 Billion Series C to Drive Global Hyperscale Expansion

On January 5, 2026, DayOne Data Centers announced it had entered into definitive agreements for more than US$2.0 billion in Series C equity financing, one of the largest private capital raises in the data center sector, led by existing investor Coatue and joined by global institutions including Indonesia’s sovereign wealth fund, INA. Priced at a 100% premium to its prior round and following US$1.9 billion raised in 2024 plus a €1 billion mezzanine facility in 2025, the funding will accelerate DayOne’s global expansion, particularly its hyperscale campuses in Lahti and Kouvola in Finland and its footprint across the SIJORI region, Thailand, Japan and Hong Kong, bolstering its ability to deliver high-density, AI-focused, sustainable infrastructure against roughly 1GW of secured customer commitments and reinforcing its positioning as a leading next-generation hyperscale platform in Asia-Pacific and Europe.

The most recent analyst rating on (GDS) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on GDS Holdings stock, see the GDS Stock Forecast page.

GDS Holdings Reports Strong Q3 2025 Financial Performance

GDS Holdings Limited announced its financial results for the third quarter of 2025, reporting a 10.2% year-over-year increase in net revenue to RMB2,887.1 million and a net income of RMB728.6 million, reversing a net loss from the previous year. The company highlighted its strategic execution and strong performance, driven by the increasing demand from AI and the successful ramp-up of its data centers, which contributed to a significant gain on deconsolidation of subsidiaries and improved financial flexibility for future growth.

The most recent analyst rating on (GDS) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on GDS Holdings stock, see the GDS Stock Forecast page.