Why VNET Group Inc. (VNET) Went Down On Thursday?

We recently published a list of Pulse of the Market: Wednesday’s 10 Worst Performers. In this article, we are going to take a look at where VNET Group Inc. (NASDAQ:VNET) stands against other Wednesday’s worst performers.

Shares on Wall Street bounced back from a bloodbath, with all main indices ending in the green on Wednesday, as investors cheered the Federal Reserve’s decision to keep interest rates unchanged.

The tech-heavy Nasdaq led the gains, rallying 1.41 percent, followed by the S&P 500 with a 1.08 percent gain, and the Dow Jones, by 0.92 percent.

Meanwhile, 10 companies defied overall market optimism, booking losses during the trading session. In this article, let’s take a look at the 10 worst-performing stocks and explore the reasons behind their drop.

To come up with the list, we considered only the companies with a $2-billion market capitalization and $5 million in trading volume.

A close up image of a application hosting server with the company’s branding on it.

VNET Group Inc. (NASDAQ:VNET)

VNET Group saw its share prices decline by 9.96 percent on Wednesday to end at $9.85 apiece as investors sold off positions amid the lack of catalysts to spark buying appetite.

The drop came despite the company’s upgraded rating and price target from an investment firm.

On Monday, Bank of America raised its price target for VNET to $17.30 from $14.50 previously, representing a 75.6-percent upside from its closing price on Wednesday. It also maintained a “buy” rating on the company.

The more optimistic outlook was based on the company’s much higher guidance on capacity delivery targets, now between 400 to 450 MW as compared with the 153MW actual delivery in 2024.

In its latest earnings release, VNET said it narrowed its fourth-quarter net loss attributable to the company by 99 percent to RMB11.1 million from RMB2.4 billion in the same period a year earlier, as net revenues increased by RMB2.246 billion from RMB1.898 billion.

Meanwhile, it swung to a net income of RMB183 million in full-year 2024 from a RMB2.6 billion net loss a year earlier, as revenues grew by 42 percent to RMB1.832 billion from RMB1.292 billion.

Overall, VNET ranks 3rd on our list of Wednesday’s worst performers. While we acknowledge the potential of VNET 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 as promising as VNET but 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 is originally published at Insider Monkey.