What Makes GDS Holdings Limited (GDS) an Investment Choice?

2 hours ago 1

Soumya Eswaran

Wed, December 10, 2025 astatine 6:19 AM CST 4 min read

Baron Funds, an concern absorption company, released its “Baron Emerging Markets Fund” third-quarter 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. The money returned 10.89% (Institutional Shares) successful the 3rd 4th compared to a 10.64% instrumentality for the MSCI Emerging Markets Index (the Benchmark) and a 11.48% instrumentality for the MSCI Emerging Markets IMI Growth Index (the Proxy Benchmark). YTD, the money returned 31.79% compared to 27.53% and 28.19% for the indexes. The steadfast was satisfied with the quarterly results, peculiarly fixed the underperformance of Indian equities during that period, but it is inactive good up of some the Benchmark and the Proxy Benchmark connected a year-to-date and one-year trailing basis. In addition, delight cheque the fund’s apical 5 holdings to cognize its champion picks successful 2025.

In its third-quarter 2025 capitalist letter, Baron Emerging Markets Fund highlighted stocks specified arsenic GDS Holdings Limited (NASDAQ:GDS). GDS Holdings Limited (NASDAQ:GDS) is simply a information halfway relation successful the People’s Republic of China. The one-month instrumentality for GDS Holdings Limited (NASDAQ:GDS) was 12.39%, and its shares gained 72.84% implicit the past 52 weeks. On December 09, 2025, GDS Holdings Limited (NASDAQ:GDS) banal closed astatine $36.02 per share, with a marketplace capitalization of $6.898 billion.

Baron Emerging Markets Fund stated the pursuing regarding GDS Holdings Limited (NASDAQ:GDS) successful its 3rd 4th 2025 capitalist letter:

"During the quarter, we besides added to our China value-added taxable by reinitiating an concern successful GDS Holdings Limited (NASDAQ:GDS), an relation of mission-critical information halfway facilities successful China and internationally with halfway customers specified arsenic Alibaba, Tencent, Baidu, ByteDance and Kuaishou. In our view, China is successful the aboriginal innings of scaling its AI ecosystem on with rising penetration of unreality computing, integer payments, and short-form video that should supply secular maturation tailwinds for information halfway operators similar GDS. The company’s halfway competitory advantages are nether pinned by entree to large-scale powerfulness successful Tier-1 cities successful China that tin enactment latency delicate applications, a agelong way grounds of improvement to conscionable lawsuit time-sensitive deployments, and starring marketplace stock wrong the third-party carrier-neutral information halfway space. We person a agelong past with GDS since its IPO successful 2017. We precocious traveled to Asia to circuit the company’s recently developed information halfway field successful Malaysia and interacted with GDS International’s (renamed “DayOne”) enforcement team. We besides conducted extended marketplace owed diligence by gathering with respective planetary competitors based successful Singapore. In our view, DayOne, which precocious completed an awesome backstage superior raise, volition proceed to spot its valuation emergence fixed its charismatic maturation outlook. Ultimately, the worth of this concern should output $15 to $20 per stock to GDS implicit the adjacent 12 to 18 months with a planned listing of the concern implicit the adjacent year. The contracted quality of currency travel maturation is under-appreciated with currency travel ramping from astir $200 cardinal to $1 cardinal implicit the adjacent 2 years based connected definitive contracts. This implies we are investing successful GDS’ mainland China concern astatine lone 11 to 12 times EBITDA, a steep discount to planetary peers, suggesting sizeable upside. Furthermore, GDS precocious listed a subset of its assets into a nationalist REIT vehicle, which is present valued astatine much than 20 times currency flow."