10 Mid-Cap IT Stocks Outperforming The Market In 2025

1. VNET Group Inc. (NASDAQ:VNET) 

VNET Group Inc. is an investment holding company that provides hosting and related services in China.  The company offers interconnectivity services, managed hosting services, and value-added services. It provides its services to individuals, government agencies,  gaming & entertainment, e-commerce, financial services and other industries.

VNET stock has nearly doubled since the 1st of January 2025. However, even this performance pales in comparison to the 466% one-year returns. This is a $2.4 billion market cap company that may well be experiencing a re-rating right now. Getting in while it’s hot may not be everyone’s cup of tea. But let’s try to dig more and see if the rally is justified and if there’s still enough juice left in it.

One of the reasons for the company’s outperformance is that the barriers to entry for AI-driven data centers are very high. When companies need to deploy any significant IR capacity in a short period of time, there’s only a handful of companies that can do that, VNET being one of them. The company also benefits from its main competitors, ZDATA and Centrin Data, shifting their focus to other parts of their business.

As long as AI training and inference demand keeps up, VNET’s business looks pretty solid. A solid pipeline of orders coupled with this demand can continue the stock’s revival, which had seen a lot of shareholder wealth destruction in the last 4 years.

VNET Group Inc. is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held VNET at the end of the third quarter which was 27 in the previous quarter. While we acknowledge the potential of VNET as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as VNET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.