Shares of GDS Holdings Ltd (GDS), a China-based data center operator, surged 5.3% in the pre-market session on Tuesday, building on an 8.81% rally from the previous trading day.
The stock's strong pre-market performance was driven by an analyst upgrade and raised price target from investment bank TD Cowen. Citing GDS's impressive Q3 results and expectations of a Q4 beat, TD Cowen raised its price target on GDS to $39 from $27, while maintaining a Buy rating.
The bullish outlook highlights GDS's significant growth potential in China's booming artificial intelligence (AI) and data center market. TD Cowen noted that GDS achieved a record 25,600 square meters of data center space installed for Tier 1 companies in Q3, fueled by robust AI demand. The investment bank expressed confidence in GDS meeting its 2024 target of 60,000 square meters of net installations with 431 MW of total bookings.