Shares of GDS Holdings Ltd. (HK: 9992) surged on Friday after the Chinese data center operator reported quarterly results that exceeded market expectations.
The company posted adjusted net income of $11.3 million for the second quarter, compared with a loss of $1.2 million in the same period last year. Revenue rose 22% year-over-year to $315.7 million, driven by increased demand for cloud and AI infrastructure services.
GDS also raised its full-year revenue guidance, forecasting growth of 20% to 22% compared with its prior estimate of 18% to 20%. The company attributed the upward revision to sustained enterprise and hyperscale customer demand.
Analysts at Citigroup and Morgan Stanley noted that GDS’s performance reflects broader trends in China’s digital infrastructure sector, where investment in data centers is accelerating amid AI adoption and cloud migration.
The stock, which had lagged peers in recent months, gained as much as 12% intraday before paring gains to around 8% by midday trading in Hong Kong. The surge lifted its market capitalization to approximately $5.8 billion.
GDS operates over 200 data centers across China and serves major clients including Alibaba, Tencent, and JD.com. The company has expanded its footprint in recent quarters to meet rising demand for high-performance computing and AI workloads.
Investors will monitor the company’s ability to sustain growth as competition intensifies in China’s data center market.
