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<Research>G Sachs: AI Investment Pushes IDC Re-rating; GDS Rated Buy
Goldman Sachs published a research note stating that the emergence of DeepSeek model challenged assumptions about the cost of traditional AI training, shoring up demand for AI reas...
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<Research>G Sachs: AI Investment Pushes IDC Re-rating; GDS Rated Buy
Recommend
27
Positive
40
Negative
12
 
 

Goldman Sachs published a research note stating that the emergence of DeepSeek model challenged assumptions about the cost of traditional AI training, shoring up demand for AI reasoning more rapidly. The broker considered that AI development is still in its early stages, but that low-cost AI promotes more sustainable development of computing infrastructure, such as data centers, rather than inhibiting its growth.

The recent developments in AI indicated a potential rebalancing among the key building blocks of AI, Goldman Sachs viewed. Against the backdrop of multiple re-ratings due to increased investment in AI, the introduction of new LLMs to cut training and reasoning costs, and rising investor sentiment towards AI-related stocks, the broker updated its valuations and TPs for GDS-SW (09698.HK)  +2.650 (+8.833%)    Short selling $23.57M; Ratio 14.467%   (GDS.US)      and KINGSOFT CLOUD (03896.HK)  +0.040 (+0.449%)    Short selling $27.47M; Ratio 3.573%   (KC.US)      .

In the case of GDS, Goldman Sachs was bullish on its value accretion opportunities, believing that the company is well positioned to capture demand from AI reasoning. In addition, the broker is awaiting updates for the US rules on AI diffusion, which may affect the longer-term growth prospect of GDS. Goldman Sachs set a target price of HKD38.3 for GDS H-shares and USD39.2 for US-shares, both with a Buy rating.

In the case of KINGSOFT CLOUD, Goldman Sachs attributed the company's share price rise to stronger-than-expected investor reaction to factors including the company's 2025-27 framework agreement with related parties XIAOMI-W (01810.HK)  +1.350 (+3.173%)    Short selling $577.31M; Ratio 11.034%   and KINGSOFT (03888.HK)  0.000 (0.000%)    Short selling $105.36M; Ratio 22.397%   ; Xiaomi's bigger investment in AI; and the company's launch of multiple AI models to reduce AI training and reasoning costs. Goldman Sachs set a target price of USD13.7 on Kingsoft Cloud's US shares, giving it a Neutral rating.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-02-12 12:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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