Shares of VNET Group (VNET.US) and GDS Holdings (GDS.US) rose more than 7% on Tuesday, while Kingsoft Cloud Holdings (KC.US) gained over 5%.

The move follows a report from Goldman Sachs forecasting that China's daily Token usage will reach 350 trillion by year-end, equating to 10.5 quadrillion Tokens per month by December 2026.

Top Sector Picks for the Coming Months

The cloud and data center sub-sector remains the firm's most favored area for the second half of 2026.

Goldman Sachs noted that while first-quarter capacity expansion and utilization fell short of expectations, anticipated price increases for cloud services and continued Token expansion are expected to drive cloud growth and margin expansion.

Furthermore, increased capital expenditure from hyperscale cloud operators is anticipated to provide a boost.

Supportive Capital Expenditure Forecast

The firm currently estimates that the combined capital expenditure of ByteDance, Baidu, Alibaba, and Tencent (BBAT) will reach $100 billion for the full year 2026, with a heavier weighting in the second half.

This projected spending is expected to support accelerated quarterly growth for data centers in the latter part of the year.