Why GDS Holdings Stock Was Skyrocketing This Week

GDS Holdings (NASDAQ:GDS) hasn't yet scheduled its upcoming quarterly earnings release. Despite that, over the past few days several analysts have published bullish updates on the Chinese data center operator in anticipation of the event. As a result, GDS' share price was enjoying a 32% week-to-date lift as of Friday morning, according to data compiled by S&P Global Market Intelligence.

IPO rumors scotched, but analysts not discouraged

On Tuesday, GDS stock saw a sudden and sharp increase when Bloomberg reported the previous night that unidentified "people familiar with the matter," said the company was planning an initial public offering (IPO) of its DayOne international business.

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However, this was negated the following day by management. In a regulatory filing it wrote, "To the best of the Company's knowledge and as at the date of this announcement, DayOne had no concrete or definitive plan on an initial public offering."

This apparently hasn't dissuaded analysts tracking GDS stock to become more positive about the company. On Tuesday Daiwa Securities' Robin Leung upgraded its recommendation on the shares to buy from neutral, while the previous day TD Cowen's Michael Elias substantially raised his price target. Elias upped this to $39 per share from his previous $27, maintaining his buy recommendation as he did so.

Growth in the cards

According to reports, Elias expects GDS to post slightly better fourth-quarter headline fundamentals than the consensus pundit projections. The basis for this is his belief that the company will reveal strong sequential growth in data center leasing, a core activity driving its business.

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Eric Volkman 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.