US Stock Alert: GDS Holdings Gains 3% Pre-Market Following UBS Target Price Upgrade

Deep News
Aug 18

GDS Holdings Ltd (GDS.US) surged 3.09% in pre-market trading, reaching $32.38 per share.

On the news front, UBS issued a research report stating that due to the continued prospects of GenAI demand and higher barriers to entry in the AI data center industry, the firm expects GDS Holdings' development yield to maintain at least 14% or 7 times capital expenditure until EBITDA reaches maturity.

The bank anticipates that GDS Holdings' 7x development cost will translate into high single-digit percentage unlevered 10-year internal rate of return, which implies limited room for further rental declines given lower net profit margins without strong execution capabilities.

UBS has raised its target price from $45 to $50, maintaining a "Buy" rating on the stock.

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