GDS Holdings Ltd, a leading developer and operator of high-performance data centers in China, witnessed a pre-market plunge of 5.43% on Monday. The stock's decline can be attributed to an analyst downgrade from Jefferies.
Jefferies downgraded GDS Holdings from Buy to Hold and raised the price target to $45 from $27.06. The downgrade was based on Alibaba's (BABA) capital expenditure guidance, which Jefferies believes will impact GDS Holdings' growth prospects.
The analyst firm cited concerns over Alibaba's capex guidance, stating that it could potentially slow down GDS Holdings' hyperscale demand. However, Jefferies acknowledged GDS Holdings' strong position in the Chinese data center market and its potential for future growth.