Billionaire Seth Klarman’s 10 Stock Picks with Huge Upside Potential

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1. GDS Holdings Limited (NASDAQ:GDS)

Upside Potential as of April 29: 86.48%

Baupost Group’s Stake Value: $100,979,000

GDS Holdings Limited (NASDAQ:GDS) develops and operates high-performance data centers, mainly in China. It provides data center services like colocation (space for servers), managed services, and private connections to public clouds. It also offers hybrid cloud management and outsourced data center solutions.

In Q4 2024, GDS Holdings Limited (NASDAQ:GDS) reported a 9.1% year-over-year net revenue increase to RMB2,690.7 million (US$368.6 million) for continuing operations. It stated that the growth came from the ramp-up of its data centers. For the full year, net revenue grew 5.5% to RMB10,322.1 million (US$1,414.1 million). Adjusted EBITDA rose 13.9% to RMB1,297.7 million in the quarter, with a margin of 48.2%.

GDS Holdings Limited (NASDAQ:GDS) executed a landmark transaction on March 10, 2025, which resulted in monetizing a 70% equity interest in certain data centers to a private REIT (P-REIT). The transaction was at an enterprise value to EBITDA multiple of 13 times and yielded net cash proceeds of RMB500 million at closing. This move aligns with the company’s asset monetization strategy whose aim is to reduce its net debt to 5-6 times EBITDA over the next 12-24 months. On March 20, 2025, JPMorgan raised its price target for GDS (NASDAQ:GDS) to $34.00 from $7.50. The analysts maintained a Neutral rating.

While we acknowledge the potential of GDS Holdings Limited (NASDAQ:GDS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GDS but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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