GDS Holdings Ltd (NASDAQ:GDS), a leading data center operator in China, saw its stock plummet 5.10% in pre-market trading on Thursday, continuing its downward trend from the previous day. This decline comes despite recent analyst upgrades and price target increases, suggesting that investors remain concerned about the company's revenue performance.

The sell-off appears to be a continuation of Wednesday's 13.97% drop, which was triggered by GDS Holdings' mixed first-quarter results. While the company reported better-than-expected earnings per share of -Y1.89, beating the analyst estimate of -Y3.04, it fell short on revenue estimates. This miss seems to have overshadowed the company's impressive turnaround in profitability, where it swung to a net income attributable to shareholders of RMB4.19 billion from a RMB3.16 billion net loss in the fourth quarter of 2024.

Interestingly, the pre-market decline comes in the face of positive analyst actions. Raymond James upgraded GDS Holdings to Strong Buy from Outperform, maintaining a price target of $53. Additionally, Citizens JMP analyst Greg Miller raised the firm's price target on GDS to $40 from $35, keeping an Outperform rating. However, these upgrades appear insufficient to assuage investor concerns about the company's revenue growth, highlighting the market's current focus on top-line performance over profitability improvements for growth stocks in the data center sector.