GDS Holdings Limited (NASDAQ:GDS) is one of the Unstoppable Stocks to Buy and Hold for the Next 5 Years. On September 19, Raymond James reiterated its “Strong Buy” rating on the company’s stock with a price target of $53.00, highlighting potential growth catalysts. The firm opines that GDS Holdings Limited (NASDAQ:GDS) remains well-positioned to benefit from accelerating growth in China’s data center market once AI chips are more widely available.
In Q2 2025, GDS Holdings Limited (NASDAQ:GDS) accelerated the delivery of its backlog while maintaining a selective approach to new orders. The successful IPO of its C-REIT on the Shanghai Stock Exchange reflects a key strategic milestone. Moving forward, GDS Holdings Limited (NASDAQ:GDS) remains well-positioned to capture new business opportunities in Tier 1 markets, thanks to the AI evolution. In Q2 2025, its net revenue came in at RMB2,900.3 million (US$404.9 million), reflecting 12.4% YoY growth, which was mainly because of the continued ramp-up of its data centers.
Baron Funds, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“GDS Holdings Limited (NASDAQ:GDS) is a leading data center operator in Tier 1 cities in China, with a growing presence across Asia through its now de-consolidated international business, DayOne. Shares performed well in February, driven by early signs of AI-related demand – highlighted by a major 152-megawatt deal with a leading cloud hyperscaler, Alibaba – and optimism around accelerating growth in its international business. Investor sentiment was further supported by stronger-than-expected capex from Alibaba, signaling a potential rebound in hyperscale demand, and by the monetization of select assets at premium valuations through a REIT transaction anchored by one of China’s largest life insurers. However, shares gave back gains in March as concerns resurfaced around potential elevated capital needs to serve a higher level of demand, as well as broader macro risks. Specifically, investors grew increasingly wary of renewed threats on further NVIDIA chip restrictions, overall tightening trade restrictions, and the uncertain trajectory of U.S. – China geopolitical relations. Despite near-term volatility, we remain constructive on the stock and fundamentals. GDS trades at an undemanding valuation, with clear catalysts ahead: accelerating revenue, progress toward deleveraging, and significant embedded value in its international operations. With durable secular tailwinds in cloud computing and AI infrastructure, and deep relationships with leading technology firms in China and the U.S., GDS remains well positioned for long-term value creation.”
While we acknowledge the potential of GDS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GDS and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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