Why GDS Stock Plummeted This Week

GDS (NASDAQ: GDS) stock got hit with sell-offs following the company's fourth-quarter report this week. The China-based data center company's share price ended this week's trading down 21.5% from the previous week's close, according to data from S&P Global Market Intelligence.

GDS published its fourth-quarter results before the market opened on Wednesday, and investors weren't happy with the business' performance in the period. But despite the big sell-off, the stock is still up roughly 231% over the last year.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

GDS's Q4 release spurred a big sell-off for the stock

GDS posted earnings $3.08 per American depositary share on sales of $368.6 million in the fourth quarter, but the profit stemmed from one-time accounting events. Meanwhile, the company posted a loss from continuing operations of $23.8 million in the period. Revenue was up 9.1% year over year, with growth mostly driven by the continued expansion of the company's data center operations.

What's next for GDS?

For the full-year period, GDS is guiding for sales to come in between 11.29 billion Chinese yuan ($1.56 billion) and 11.59 billion Chinese yuan ($1.6 billion). At the midpoint of the guidance range, that would mean annual sales growth of roughly 11%. While the company's sales growth looks poised to accelerate this year, investors were hoping for a stronger rate of expansion.

With artificial intelligence (AI) and other technologies driving up demand for data center services and GDS expanding its operating footprint, the business has some big sales expansion opportunities ahead of it. But relatively conservative guidance for sales growth this year suggests that revenue growth could wind up being slower than investors previously anticipated.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $305,226!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,382!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $517,876!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 18, 2025

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.