Is GDS a good stock to buy? We came across a bullish thesis on GDS Holdings Limited on Valueinvestorsclub.com by TrustTheProcess1. In this article, we will summarize the bulls’ thesis on GDS. GDS Holdings Limited’s share was trading at $42.41 as of May 1st. GDS’s trailing and forward P/E were 65.87 and 357.14 respectively according to Yahoo Finance.
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GDS Holdings Limited (GDS) is a leading data center developer in China with a minority stake in rapidly growing international operator DayOne, creating a compelling sum-of-the-parts opportunity as both businesses inflect positively. GDS built its domestic leadership during China’s initial cloud boom by securing scarce land and power in Tier-1 cities and forming deep relationships with hyperscalers like Alibaba Group and Tencent.
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While industry growth slowed between 2021 and 2023 due to regulatory pressures and overcapacity, conditions have now structurally improved, with AI-driven demand accelerating and excess supply being absorbed. GDS’ China business has returned to growth, delivering approximately 15% organic EBITDA expansion in 2025 with expectations for sustained double-digit growth as hyperscalers ramp AI infrastructure spending.
Meanwhile, DayOne represents a high-growth international platform, with over 1GW of contracted capacity exiting 2025 and strong expansion across key markets such as Malaysia, Thailand, and Finland, benefiting from global constraints in power availability and permitting. The company’s early land and power acquisition strategy positions it favorably to capture rising inference-driven demand globally.
A key catalyst lies in the anticipated IPO of DayOne in late 2026, which is expected to unlock significant value currently obscured within GDS’ consolidated structure. On a sum-of-the-parts basis, the China business remains undervalued despite improving fundamentals, while DayOne commands premium valuations supported by strong contracted growth. Together, these dynamics imply substantial upside potential, with accelerating China bookings, AI-led demand, and strategic value realization acting as key drivers for a rerating.
Previously, we covered a bullish thesis on Microsoft Corporation (MSFT) by Ray Myers in May 2025, which highlighted its dominant enterprise software ecosystem, Azure-led cloud growth, and expanding AI integration driving long-term growth. MSFT’s stock price has depreciated by approximately 8.59% since our coverage. TrustTheProcess1 shares a similar view but emphasizes on GDS’ AI-driven data center demand, sum-of-the-parts valuation, and value unlocking through the potential DayOne IPO.
GDS Holdings Limited is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held GDS at the end of the fourth quarter which was 53 in the previous quarter. While we acknowledge the risk and potential of GDS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GDS and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
