GDS goes gigawatt: reservations, new markets, and a raised target

The inflection point

GDS Holdings reported its strongest quarter ever.

AI is transforming our business. Our sales momentum is the strongest we have ever seen.

Reservations: a new form of committed demand

What's genuinely new this quarter is the formalization of megawatts of reservations. Alongside binding take-or-pay bookings, customers now ask GDS to reserve deployable capacity at the same site for future needs. This reservation layer has already reached 600 MW in the first half, with a target of over 1 GW by year-end. Management was explicit that reservations convert to firm orders at effectively 100% based on recent experience. As William Huang put it, “based on our last 12 or 18 months experience, the reservation... provide a very, very high certainty for our future booking.” — William Huang, CEO · 2026-08-13 This gives GDS unprecedented visibility into its pipeline.

Equally important is the geographic expansion. New business is now split roughly half between established Tier-1 markets and new markets — Ulanqab and Horinger in Inner Mongolia, Shaoguan in Guangdong, and the Changshu campus in Jiangsu. This validates the company's land bank strategy, which CEO William highlighted as a key differentiator: “we have built up our land bank in the last 18 months so quickly... take some advantage of the GDS brand.” — William Huang, CEO · 2026-08-13 The movement into new power-rich regions is a deliberate shift from the crowded Tier-1 core.

Backlog, CapEx, and the raised target

The backlog has swelled to 757 MW, with an estimated RMB 2.2 million of adjusted EBITDA per megawatt — implying roughly RMB 1.6 billion of booked-but-not-billed EBITDA. CFO Dan Newman forecast move-in to more than double in 2027, heavily weighted to the second half. To fund this, CapEx guidance was raised to RMB 10 billion, with unit costs pinned at around RMB 20 million per MW. Financing remains disciplined: 60% debt / 40% equity at the project level, using onshore RMB debt and a growing C-REIT monetization platform. The first post-IPO asset injection is already under regulatory review.

This is a far more confident GDS than the one that, just three months earlier, was still hedging on chip supply and order selectivity. In May 2026, William said: “we are still very disciplined to select the order... we are looking at a more high number booking. But it's too early to say what kind of level we can reach.” — William Huang, Management · 2026-05-20 Today that uncertainty has evaporated. The company's own keyword trajectory shows a massive jump in momentum for gigawatt and booking, and the tone has shifted from cautious to aggressive.

From caution to confidence

The contrast with prior quarters is stark. Back in November 2025, William was still describing the market as approaching an "inflection point" and noting that “another signal is domestic chip is catching up” — William Huang, CEO · 2025-11-19. Now the inflection has arrived. The company is raising guidance, adding capacity in new geographies, and monetizing assets through the C-REIT vehicle — all while keeping leverage at 4.7x.

The risk, as ever, is the concentration of demand and the timing of GPU availability. But with reservations protecting future bookings and a take-or-pay structure locking in revenue, GDS has structurally de-risked its growth. The decision to lean into new markets and machine-scale infrastructure is a bet that AI inference will follow training, and the early signs — 470 MW booked in six months — suggest that bet is paying off.

In short, GDS is no longer waiting for the AI wave; it is riding it. The raised sales target and the new reservation framework mark a genuine strategic pivot, one that investors will be watching closely in the quarters ahead.