GDS-SW (09698) experienced a significant surge in the market, with its stock price soaring 16.15% during Friday's trading session. The sharp rise comes amid a flurry of positive developments in the AI and cloud computing sectors, which are expected to drive increased demand for data center services.

The rally appears to be fueled by several factors. Firstly, news emerged that tech giants Alibaba and Baidu have begun using internally designed chips for training their AI large language models, potentially increasing the need for advanced data center capabilities. Additionally, Alibaba, GDS-SW's largest customer, announced plans to issue approximately $3.2 billion in convertible notes, with about 80% of the proceeds earmarked for enhancing cloud infrastructure, including data center expansion.

GDS Holdings Ltd, the parent company of GDS-SW, stands to benefit significantly from these developments. The company has established full-scale cooperation with major cloud service providers, including Alibaba Cloud, Tencent Cloud, AWS, and others. With Alibaba accounting for over 30% of GDS Holdings Ltd's total committed area and net revenue in China, the increased investment in cloud infrastructure is likely to translate into substantial growth opportunities for GDS-SW. Furthermore, industry analysts have highlighted the company's improving utilization rates and the overall positive cycle in the data center industry, contributing to investor optimism and driving the stock's impressive performance.