VNET Group Stock Surges 67% in a Year, Analysts Maintain Bullish Stance

VNET Group, Inc. (NASDAQ: VNET), a leading carrier-neutral data center services provider in China, has seen its stock price climb an impressive 67% over the last twelve months, closing at $11.31 as of January 28. The rally underscores growing investor confidence in companies powering Asia's digital expansion.

Wall Street sentiment remains overwhelmingly positive. Of the twelve analysts covering the stock, eleven recommend it as a Buy, with a median price target of $15.21—suggesting a potential 34.5% gain from recent levels. Bank of America recently reiterated its Buy rating on January 9, with analyst Daley Li affirming a $15.10 price target.

The momentum has carried into the new year, with shares up more than 33% year-to-date and gaining over 12% in the past week alone. This performance highlights a sustained investor appetite for firms essential to cloud computing and data management, sectors experiencing tailwinds from corporate digitization and regulatory support in China.

"VNET is a pure-play on the backbone of China's internet economy," said Michael Chen, a technology sector portfolio manager at Horizon Capital. "Their footprint in key hubs positions them well, regardless of which cloud provider wins market share."

For the upcoming quarter, results for which are expected in mid-March, consensus estimates point to earnings per share of ¥0.18, a substantial increase from ¥0.04 a year ago. Revenue is projected to grow over 17% year-over-year to approximately ¥2.63 billion.

However, not all observers share the unbridled optimism. "Let's not ignore the elephant in the room," commented Sarah Jenkins, an independent market strategist known for her critical views. "This is a capital-intensive business in a highly competitive and regulated market. The debt levels and geopolitical overhang for U.S.-listed Chinese firms are real risks being glossed over in this frenzy."

David Miller, a retail investor following the tech sector, offered a more measured take: "The numbers speak for themselves—strong growth, analyst support. I've been adding to my position gradually. It's a volatile stock, but the long-term trend for data demand is undeniable."

VNET Group operates a network of data centers across China, offering colocation, managed hosting, and cloud infrastructure services, catering to a broad clientele from internet giants to financial institutions.