Shares of GDS Holdings may see a boost as artificial intelligence darling Nvidia resumes shipments to China, according to JPMorgan. The firm upgraded the data center stock to overweight from neutral and raised its price target to $46 from $34. That updated target calls for about 22% upside from Monday’s closing level. Earlier this week, Nvidia said that it hopes to start deliveries of its H20 general processing units “soon” after the U.S. government assured it that licenses would be granted. The company halted sales back in April after the U.S. government said that it would need a license to sell the chips to China. “We are upgrading GDS to OW, given the resumption of H20 shipments into China … should drive an upside case for the domestic DC business,” analyst Gokul Hariharan wrote. “Demand indications from Tier-1 [cloud solution provider] customers remain quite strong for AI inference compute (as seen by the 150 MW order from Alibaba in 1Q25) and we see a pathway to continued upgrades in the China pipeline and revenue growth.” U.S.-listed shares of the China-based company were more than 1% higher in the premarket following the move. Shares have also rallied more than 90% in the past three months and around 66% in the past six. GDS 3M mountain GDS, 3-month The analyst also noted that although capacity for AI training compute in China could be “balanced or in mild oversupply” due to an “aggressive” buildout in remote locations such as Ulanqab, he thinks that GDS has “very limited” exposure to that area of the market. Even with some oversupply, there could be some pricing upside next year as more AI inference demand kicks in, he added. Beyond China, the analyst said that GDS’s international business has been “quite strong” and thinks that its international arm known as DayOne should continue to see gains even with rumblings of GPU restrictions in countries like Malaysia. “We believe that aggregate growth for DayOne … should continue, given the opening up of new markets (Thailand, Europe) and continued strong demand from its largest Chinese social media customer,” Hariharan also wrote. Most of Wall Street is similarly bullish on the name, as 17 out of 18 analysts have a strong buy or buy rating, LSEG data shows. Its consensus target of almost $45 also implies more than 18% upside from here.
