GDS Holdings Ltd (GDS), a leading Chinese data center operator, witnessed a significant pre-market plunge of 13.41% on Monday. The stock's sharp decline can be attributed to an analyst downgrade by Jefferies, which cited concerns over the potential impact of Alibaba's (BABA) capital expenditure guidance on GDS Holdings' growth prospects.
Jefferies downgraded GDS Holdings from a Buy rating to a Hold rating, while raising the price target to $45 from $27.06. The downgrade was based on Alibaba's capex guidance, which Jefferies believes could potentially slow down GDS Holdings' hyperscale demand.
However, not all analysts share the same sentiment. Nomura maintained a Buy rating on GDS Holdings and adjusted the price target to $63 from $25, indicating its belief in the company's future growth potential in the Chinese data center market.