GDS Holdings Ltd management stated that the previously signed 152MW hyperscale order is expected to significantly accelerate customer move-in pace in the second half of 2025, and despite chip supply uncertainties, remains confident in AI inference demand for the coming years.

On August 21, Bank of America Merrill Lynch noted in its latest research report that GDS Holdings Ltd's Q2 2025 earnings call delivered positive signals. Management expects customer move-in pace to notably accelerate in the second half of 2025, primarily benefiting from the delivery of previously contracted 152MW hyperscale orders, which will directly translate into revenue growth.

Bank of America Merrill Lynch stated that while chip supply uncertainties continue to make AI-related new orders relatively cautious, management maintains an optimistic outlook on AI demand prospects for the coming years, expecting inference demand to become a key driving force.

Additionally, Bank of America Merrill Lynch noted that management revealed during the conference call that overseas business platform DayOne performed strongly in Q2, adding 246MW in committed orders, including new orders in Thailand and Finland. The company is conducting Series C equity financing and plans to IPO within 18 months.

Bank of America Merrill Lynch maintained its Buy rating and raised the target price from $47.6 to $50.6, primarily based on the company's strong market position as China's largest carrier-neutral data center operator, sufficient domestic order backlog supporting growth, and prospects for overseas expansion as a new growth driver.

According to the latest financial report, data center business growth drove GDS Holdings Ltd's Q4 2024 revenue up 9.1%, with net profit turning from loss to profit year-over-year. Looking ahead to 2025, GDS Holdings Ltd expects full-year total revenue to grow approximately 9.4% to 12.3% year-over-year. The company expects full-year 2025 capital expenditure of approximately RMB 4.3 billion.

**Customer Move-in Pace Expected to Accelerate Significantly in Second Half**

The research report stated that GDS Holdings Ltd management clearly indicated during the conference call that customer move-in speed is expected to improve notably in Q3 and Q4 2025 compared to the first two quarters. This expectation is primarily based on the previously signed 152MW hyperscale customer orders beginning delivery in the second half.

According to Bank of America Merrill Lynch analysis, GDS Holdings Ltd currently holds 185,000 square meters of project backlog (including in-service and under-construction projects), with management planning to deliver 35% of this in the second half of 2025 and another 35% in 2026. This delivery timeline demonstrates the company's solid foundation for stable revenue growth.

The company added 22,700 square meters of committed area in Q2 this year, primarily from traditional internet and cloud service businesses. GDS Holdings Ltd's utilization rate in the Chinese market currently reaches 77.5%, an improvement from the same period last year, indicating solid demand fundamentals.

**AI Inference Demand Viewed as Core Long-term Growth Driver**

Bank of America Merrill Lynch stated that despite the impact of chip supply uncertainties causing customers to remain relatively cautious with new AI-related orders, GDS Holdings Ltd management maintains strong confidence in AI demand for the coming years, particularly optimistic about inference demand development prospects.

The research report noted that management stated during the conference call that compared to training demand, AI inference will become a key driving factor for data center demand. GDS Holdings Ltd is well-positioned in this trend, with multiple sites around Beijing and Shanghai that have completed preliminary preparations and can be ready for service in a short timeframe.

Long-term, GDS Holdings Ltd holds 900MW of future development capacity in tier-one cities and surrounding areas, deliverable over the next few years. This reserve provides sufficient infrastructure support for the company to capitalize on AI inference demand growth.

**DayOne Overseas Business Shows Strong Order Momentum**

Bank of America Merrill Lynch stated that GDS Holdings Ltd's overseas business platform DayOne performed impressively in Q2, adding 246MW in committed orders, including new orders in Thailand and Finland. As of the end of Q2, DayOne's total IT power commitment reached 783MW, with IT power utilization at 213MW.

The research report noted that during Q3, DayOne secured a second site in Finland, further expanding its European market presence. Management indicated during the conference call that DayOne is likely to achieve ahead of schedule its original goal of obtaining 1GW total power commitment within three years, expecting to add 300-500MW in commitments annually in coming years.

DayOne is currently conducting Series C equity financing, with management revealing plans to achieve IPO within 18 months. This timeline demonstrates the company's confidence in overseas business development prospects and provides funding support for future expansion.