Goldman Sachs: AI investment drives IDC re-evaluation of GDS-SW (09698), Century Internet rated "buy"

Goldman Sachs Group, Inc. released a research report stating that the emergence of the "DeepSeek" model developed by Chinese artificial intelligence startup companies challenges the assumptions of traditional artificial intelligence training costs and accelerates the growth of demand for artificial intelligence reasoning. The bank believes that the current development of artificial intelligence is still in the early stages, but low-cost artificial intelligence promotes the more sustainable development of data centers and other computing infrastructure, rather than hindering its growth. Goldman Sachs Group, Inc. believes that the latest developments in artificial intelligence may lead to a reshuffling of its key components. With increased investment in artificial intelligence, the launch of new large language models to reduce training and reasoning costs, and the rising investor sentiment towards artificial intelligence-related stocks, the bank has updated its valuations and target prices for GDS-SW(09698)(GDS.US), VNET Group, Inc. Sponsored ADR(VNET.US), and KINGSOFT CLOUD(03896)(KC.US). Regarding GDS Holdings Ltd. Sponsored ADR Class A, Goldman Sachs Group, Inc. sees potential for value appreciation and believes the company can capture the demand from artificial intelligence reasoning. Additionally, the bank is awaiting updates on US regulations related to artificial intelligence communication, which could affect GDS Holdings Ltd. Sponsored ADR Class A's long-term growth prospects. Goldman Sachs Group, Inc. has set a target price of 38.3 Hong Kong dollars for GDS Holdings Ltd. Sponsored ADR Class A shares and $39.2 for US shares, both with a "buy" rating. For VNET Group, Inc. Sponsored ADR, Goldman Sachs Group, Inc. believes that the company's new wholesale parks, due to access to green power reducing electricity costs and its good record in delivery capability, can capture a share of the Chinese artificial intelligence demand. The bank expects the company's EBITDA to accelerate growth in the 2024 to 2026 fiscal years, with annual increases of 12%, 17%, and 22%, driving the compound growth of equity value. Goldman Sachs Group, Inc. has set a target price of $12.1 for VNET Group, Inc. Sponsored ADR US shares, with a "buy" rating. As for KINGSOFT CLOUD, Goldman Sachs Group, Inc. attributes the rise in the company's stock price to investor reactions being stronger than expected to factors including the framework agreements signed by the company with affiliates XIAOMI-W(01810) and KINGSOFT(03888) for 2025 to 2027, Xiaomi's increased investment in artificial intelligence, and the company's launch of various artificial intelligence models to reduce training and reasoning costs.