GDS Holdings Faces Significant Losses Amidst Market Turmoil
On Tuesday, financial analysts and investors alike were shocked by the recent market downturn, with Wall Street's main indices experiencing severe losses. In our previous publication, we outlined the ten worst-performing stocks for the day, and now we turn our focus to GDS Holdings Ltd. (NASDAQ:GDS) to evaluate how it fared compared to the other underperformers.
The overall market sentiment was profoundly impacted by the looming deadline for President Donald Trumpâs proposed tariffs on China. These tariffs could impose a staggering cumulative import tax of 104 percent, raising concerns among investors about the stability of U.S.-China trade relations. Consequently, the tech-heavy Nasdaq index suffered the most significant blow, plummeting by 2.15 percent. Following closely behind were the S&P 500, which fell by 1.57 percent, and the Dow Jones Industrial Average, which recorded a more modest decline of 0.84 percent.
In line with this trend, ten companies mirrored the broader market's decline, posting considerable losses throughout the trading day. In our analysis, we focused on stocks with a minimum market capitalization of $2 billion and a trading volume exceeding $5 million to create a comprehensive list of the worst performers.
Why Did GDS Holdings Ltd. (GDS) Experience a Decline on Tuesday?
GDS Holdings Ltd. continued its downward trajectory for the fourth consecutive trading day, experiencing a significant drop of 14.34 percent, closing at $17.68 per share. This sell-off was largely fueled by investors' growing skepticism regarding Chinese stocks in light of the ongoing trade war between the United States and China.
GDS Holdings is recognized as a prominent developer and operator of high-performance data centers in China. Despite the negative market sentiment, the company had recently released its earnings report, which showcased a notable performance. GDS reported earnings per share of -Y1.89, surpassing analysts' expectations of -Y3.04.
The stark decline in GDSâs stock price comes as a surprise given its impressive earnings report. The company posted a remarkable turnaround, swinging to a net income attributable to shareholders of RMB4.19 billion, a stark contrast to the RMB3.16 billion net loss reported in the fourth quarter of 2024. Additionally, GDS's revenues climbed by 9.34 percent, rising from RMB2.46 billion to RMB2.69 billion.
Furthermore, for the full year of 2024, GDS reported a net income attributable to shareholders of RMB3.4 billion, reversing a net loss of RMB4.29 billion from the previous year. Its annual revenue also increased by 5.3 percent, reaching RMB10.3 billion compared to RMB9.78 billion in 2023.
Despite the companyâs solid financial performance, GDS ranked second among Tuesday's worst-performing stocks. While we acknowledge the potential of GDS as a long-term investment opportunity, our analysts believe that artificial intelligence (AI) stocks present a more attractive option for those seeking higher returns in a shorter time frame. In particular, there is one AI stock that has shown resilience, appreciating in value since the beginning of 2025, while many popular AI stocks have seen a decline of approximately 25 percent. For investors interested in exploring AI stocks that are undervalued and trading at less than five times their earnings, we recommend consulting our detailed report on a promising AI stock that stands out in the current market landscape.
