5. GDS Holdings Limited (NASDAQ:GDS)
YTD-Performance: 57.08%
Number of Hedge Fund Holders: 32
GDS Holdings Limited (NASDAQ:GDS) develops and operates high-performance data centers in China, offering colocation, managed hosting, and managed cloud services. The company is carrier and cloud-neutral, allowing customers access to major telecommunications networks and public clouds within China. Its services include colocation services, managed services, and data center services.
On February 21, Raymond James analyst Frank Louthan raised the price target on the stock from $25 to $53, while maintaining a Buy rating. The analyst believes that the company’s future growth should be more stable with less associated risks. Baron Real Estate Fund in its Q4 2024 investor letter announced acquired additional shares in GDS Holdings Limited (NASDAQ:GDS). The fund believes that the shares are attractively valued and offer compelling long-term growth prospects. Moreover, the fund anticipates that the company will be able to secure additional high-demand power capacity in Southeast Asia and other international markets, which will extend the company’s growth profile. It is one of the best-performing growth stocks in 2025.
Baron Real Estate Fund stated the following regarding GDS Holdings Limited (NASDAQ:GDS) in its Q4 2024 investor letter:
“In the most recent quarter, we acquired additional shares in data center operator GDS Holdings Limited (NASDAQ:GDS). We believe the shares are attractively valued and offer compelling long-term growth prospects. Please see “Top contributors to performance for the quarter ended December 31, 2024” for more on GDS.
Shares of GDS Holdings Limited continued to perform well during the quarter, delivering returns into the mid-teens. We traveled to Asia in December to tour the company’s newly developed data center campus in Malaysia, spend additional time with GDS International’s executive team, and conduct competitor/market due diligence by meeting with the management teams of several global competitors based in Singapore. We also had the opportunity to meet the management team of the largest utility in Malaysia providing power to GDS and competitors, which provided valuable insight on the developing market. We also traveled to Hong Kong to meet, once again, with CEO/founder William Huang and CFO Daniel Newman while touring one of the company’s urban data centers with the local operating team. We came away with more confidence regarding the demand visibility and growth that GDS can capture in this region due to its first mover and other competitive advantages. In addition, we believe GDS will be able to secure additional high-demand power capacity in Southeast Asia and other international markets, which will elongate the growth profile of the company and is not currently appreciated by the broader investment community.
We remain optimistic about the company’s growth prospects over the next several years, which can be bucketed into: i) its Asia ex-China data center business (GDS International or GDSI); and ii) its mainland China data center business (GDS Holdings or GDSH)…” (Click here to read the full text)
