GDS Holdings (GDS) AI Stock Analysis

• Market Cap: $9.01B
• Dividend Yield: N/A
• Average Volume (3M): 2.12M
• Price to Earnings (P/E): 72.2
• Beta (1Y): 1.47
• Revenue Growth: 1.95%
• EPS Growth: N/A
• Country: US
• Employees: 2,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.40
• Shares Outstanding: 200,928,820
• 10 Day Avg. Volume: 2,638,954
• 30 Day Avg. Volume: 2,117,295
• 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: 10.05
• Enterprise Value/Revenue: 8.08
• Enterprise Value/Gross Profit: 35.46
• Enterprise Value/Ebitda: 15.16
• 1Y Price Target: $50.85
• Price Target Upside: 23.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $49.00 ▲(18.79% Upside)

The score is anchored by mixed financial quality—strong margins and ROE, but high leverage and weak cash flow metrics. Technicals add support as the stock is in a clear uptrend with positive momentum. Valuation is the main drag due to a very high P/E and no dividend yield, while earnings-call commentary is constructive on AI-driven demand and capital access but tempered by booking and pricing risks.

Positive Factors

Strong Profitability

GDS’s very high TTM net margin and strong ROE indicate persistent operational efficiency and pricing power in its core colocation and managed services. Durable profitability supports reinvestment into high-density capacity and cushions the business against cyclical capex swings.

AI-Driven Demand

A majority of new bookings tied to AI creates a structural demand tailwind for high-density, high-power data center capacity. This secular shift supports multi-year utilization growth, higher-value contracts, and a backlog that underpins revenue visibility and asset utilization.

Asset Monetization / Capital Access

Successful recycling of minority investments and the C-REIT program demonstrate a repeatable capital-return and monetization pathway. This reduces reliance on debt, funds capex and expansion into high-margin AI capacity, and improves long-term financial flexibility.

Negative Factors

High Leverage

Substantial balance-sheet leverage constrains financial flexibility and raises refinancing and covenant risk through cycles. Even with recent improvements in net debt/EBITDA, elevated gearing limits downside protection and increases sensitivity to slower cash generation or higher rates.

Weak Cash Conversion

Negative free cash flow conversion and low operating cash flow relative to net income signal recurring cash-generation shortfalls. This forces reliance on asset sales, equity or incremental debt to fund capex and growth, reducing sustainable internal funding for expansion.

Booking & Pricing Risk

Guidance for mid-single-digit MSR declines and reports of subdued new bookings imply structural pressure on contract renewals and pricing. Over time, this can compress average contract rates, slow revenue expansion, and force tighter margin management amid elevated move-in volumes.

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

Profitability is strong (TTM net margin 41.56%, EBIT margin 21.58%, ROE 20.16%), but financial quality is weakened by declining revenue growth, high leverage (debt-to-equity 1.88), and poor cash conversion (FCF to net income -0.73; operating cash flow to net income 0.36) with negative free cash flow growth.

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: Neutral
• Last Price: 41.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDS, the sentiment is Neutral. The current price of 41.25 is below the 20-day moving average (MA) of 43.13, above the 50-day MA of 38.28, and above the 200-day MA of 33.76, indicating a neutral trend. The MACD of 1.84 indicates Positive momentum. The RSI at 48.60 is Neutral, neither overbought nor oversold. The STOCH value of 37.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$5.34B	13.78	35.51%	―	-1.90%	―
DXC	62 Neutral	$2.42B	6.13	13.79%	―	-4.13%	2143.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDS	61 Neutral	$9.01B	72.19	5.25%	―	1.95%	―
VNET	58 Neutral	$2.76B	-35.09	-9.19%	―	20.09%	86.04%
CNDT	47 Neutral	$221.69M	-1.46	-15.87%	―	-12.45%	-142.77%

GDS Holdings Corporate Events

GDS Moves to Boost Founder’s Voting Power to Meet Chinese Data-Security Client Demands

On January 26, 2026, GDS Holdings announced it will convene an extraordinary general meeting and separate meetings for holders of its Class A ordinary shares, Series A preferred shares and Class B ordinary shares on February 24, 2026 in Shanghai, with the notices and proxy materials already dispatched and made available on its investor relations channels and relevant regulatory websites. The primary proposal seeks shareholder approval to increase the voting power of Class B shares held by founder and CEO William Wei Huang from 20 to 50 votes per share—raising his voting stake on key board-election and articles-amendment matters from about 36.2% to 58.6%—to demonstrate majority “Chinese national” control in response to tightened regulatory and customer demands around data security and cybersecurity, thereby helping GDS retain critical financial and internet-platform clients while, according to the board, preserving its existing governance balance; Huang and his associates have committed to abstain from voting on this proposal.

The most recent analyst rating on (GDS) stock is a Hold with a $44.00 price target. To see the full list of analyst forecasts on GDS Holdings stock, see the GDS Stock Forecast page.

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.