Shares of GDS Holdings Ltd (NASDAQ: GDS) are soaring 5% in Friday's trading session, following the company's impressive second-quarter earnings report and optimistic outlook for AI-driven growth. The data center operator's performance and management's confidence in future prospects have sparked renewed investor interest.

GDS Holdings reported better-than-expected Q2 2025 results, with revenue reaching CN¥2.90 billion, up 2.6% year-over-year and exceeding analyst estimates by 2.2%. The company's net loss narrowed significantly to CN¥85.9 million, a 64% improvement from the same period last year. Earnings per share also surpassed analyst expectations by 34%, showing a loss of CN¥0.44 compared to CN¥1.30 in Q2 2024.

The positive momentum is further fueled by management's bullish stance on future growth drivers. During the earnings call, GDS Holdings executives highlighted expectations for accelerated customer move-ins during the second half of 2025, primarily benefiting from the delivery of previously contracted 152MW hyperscale orders. Additionally, the company expressed strong confidence in AI-related demand for the coming years, particularly in the inference segment, positioning GDS Holdings to capitalize on this emerging trend. In response to these developments, several analysts have raised their price targets for GDS stock. Notably, Bank of America Merrill Lynch increased its target from $47.6 to $50.6, while Nomura adjusted its price target to $41.50 from $36.80, both maintaining Buy ratings on the stock.