30 Best and Worst Data Center Stocks

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18. GDS Holdings Limited (NASDAQ:GDS)

Upside Potential: 20%

Number of hedge funds: 32

GDS Holdings Limited (NASDAQ:GDS) provides high-performance carrier-and-cloud-neutral data center and IT infrastructure services in China and Southeast Asia. The company offers colocation services, managed hosting services, managed cloud services, and other value-added services. It serves a diverse customer base, including hyperscale cloud service providers, large internet companies, financial institutions, telecommunications carriers, IT service providers, and large corporations. It is important to note that GDS Holdings Limited (NASDAQ:GDS) is not an operating company in mainland China but instead a Cayman Islands holding company. The company operates most of its business operations in mainland China through consolidated variable interest entities (VIEs) and their subsidiaries.

During its Q3 2024 call, GDS Holdings Limited (NASDAQ:GDS) announced plans to create and IPO a C-REIT, which will hold its stabilized data centers. This REIT is expected to provide the company with an additional funding stream to capitalize on new and lucrative opportunities as AI demand accelerates. On January 24, 2025, UBS reported that the plan had been approved by the Shanghai Stock Exchange, with a potential issue size of over RMB 1.6 billion. The company plans to launch the C-REIT in the second half of 2025.

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