GDS Soars 8.9%—What's Fueling the Data Center Surge?

• GDS stock rockets 8.88% to $38.11, hitting an intraday high of $39.68
• Oracle partners with GDS to build Indonesian cloud infrastructure
• C-REIT IPO finalized at RMB3.00/unit, signaling capital recycling strategy

GDS Holdings' explosive rally marks a sharp rebound after months of consolidation, fueled by strategic partnerships and regulatory milestones in China's data center sector. The stock's volatility highlights investor optimism about the company's growth trajectory amid global tech infrastructure demand.

Oracle Deal & C-REIT IPO Catalyze Growth Narrative
The surge stems from two key catalysts: Oracle's decision to lease GDS's Indonesian data centers—a strategic move to expand its cloud footprint—and the final pricing of GDS's Shanghai-listed C-REIT IPO. The REIT's RMB3.00/unit price reflects investor confidence in GDS's asset quality, while Oracle's partnership underscores the company's role as a critical infrastructure provider. These events validate GDS's position as a leader in hyperscale data center development, driving multiple expansion and capital recycling narratives.

Data Center Sector Mixed Amid Global AI Infrastructure Rush
While GDS surges, sector leader EQIX trades flat (-0.16%), reflecting broader market caution about rising energy costs and regulatory scrutiny. However, Google's $25B data center/AI investment plan and Taiwan's $19B semiconductor support package highlight tailwinds for the sector. GDS's outperformance suggests investors are favoring companies with direct exposure to Asia's cloud growth over legacy players.

Bullish Technicals & High-Leverage Call Options to Monitor
Rsi: 77.19 (overbought)
Bollinger Bands: Above upper band ($35.49)
MACD: 1.90 vs Signal 1.50 (bullish crossover)

Bulls target resistance at $39.68 ($35.00 previous close + 13% gain). Short-term momentum favors calls, but overbought RSI warns of a pullback risk near $37.50. The sector's $25B Google investment backdrop supports long-term bullish bias.

Top Options:
1. GDS20250815C38: Call, $38 strike, expires 8/15. Key stats: Delta 0.55 (neutral-bullish), Theta -0.09 (rapid time decay), Gamma 0.036 (moderate sensitivity). Leverage ratio 8.79% offers 108.78% upside at $38.11. Strong turnover ($19k) ensures liquidity. Payoff at $39.99 (5% rise): $1.99 intrinsic value.
2. GDS20250815C40: Call, $40 strike, expires 8/15. Delta 0.48 (moderate bullish), Theta -0.086 (time-sensitive), Gamma 0.037 (responsive to price moves). Leverage ratio 11.23% with 106.79% gain at current price. Turnover exceeds $400k. Payoff at $39.99: $0. (out-of-money, but theta decay creates urgency).

Hawkish view: Aggressive traders may fade overbought RSI with puts near $37.50, but calls remain the play until $39.68 resistance holds.

Backtest GDS Holdings Stock Performance
The 9% intraday surge in GDS has historically led to positive short-to-medium-term gains. The backtest data shows that following such a surge:1. Short-Term Gains: The 3-day win rate is 46.70%, indicating that nearly half of the time, the stock continues to rise in the three days following the intraday surge.2. Medium-Term Gains: The 10-day win rate is higher at 49.67%, suggesting that a larger proportion of the time, the stock maintains its upward momentum over a longer period.3. Maximum Return: The maximum return observed following the surge is 0.42% over 30 days, which is the longest period analyzed, indicating that while the gains may not be substantial, they are consistently positive.In conclusion, an intraday surge of 9% in GDS typically leads to favorable short-to-medium-term performance, making it a potentially promising entry point for investors looking to capitalize on technical price movements.

GDS's Momentum Faces Key Resistance—Watch for Shanghai REIT Liquidity
GDS's rally faces a critical test at $39.68—the August 2023 high. Bulls must sustain momentum beyond this level to avoid a retracement to $35.50. The C-REIT's liquidity post-listing and Oracle's cloud rollout timeline will be key catalysts. Traders should pair long calls with a stop below $37.00, while EQIX's stagnation (-0.16%) suggests sector leadership shifts favor Asia-focused plays. Final warning: Overbought RSI demands profit-taking on any close above $39.68 until confirmed breakout signals emerge.