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Is this Double-Digit Growth Stock the Best AI Infrastructure Play You’ve Never Heard Of?
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VNET Group, Inc.
July 16 – Pre‑market
Ticker: VNET | Sector: Information Technology Services | Market Cap: ~ $2.1B
30‑Second Take
Why now? VNET is a high-risk, high-reward power play that’s up 76.79% on the year to date and 284.20% in the previous 12 months.
That incredible momentum means VNET is performing significantly above the market average – in the last 12 months the S&P 500 has gained just 13.86% for context.
This surge has its roots in the growing demand for wholesale and retail IDC services.
While VNET runs under the radar, this stock has the bit between its teeth with increased volumes and plenty of room to move higher in the near term.
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Trade Setup
Time frame: Swing to near-term
Edge type: Momentum breakout
Snapshot Table
Metric | Value | Current Stance |
|---|---|---|
Price | $9.05 | Below average |
52‑week range | $1.71 - $16.13 | Below average |
Short interest | 8.54% | Above average |
Next catalyst | Q2 earnings, expected late August |
Chart
5-Day Synopsis: The last five trading sessions have two clearly defined patterns, with a couple of days of steady, uneventful trading followed by a spike yesterday (Tuesday) when the market opened.
With no major troughs to speak of, VNET has gained an impressive 17.39% over the past five days.
This upward trajectory continues an established pattern, with gains of 63.14% recorded in the last month.
Bull Case
Core thesis: VNET Group, Inc. is the largest private, carrier-neutral Internet and data center service provider in China.
It offers a range of hosting services to improve internet reliability, security, and speed. Its products include IDC services, cloud services, and business VPN tools.
It operates in more than 30 cities throughout China and currently has more than 7,000 hosting and related enterprise customers.
VNET’s client base includes government entities, blue-chip enterprises, and SMEs.
Its board has recently approved a $50 million share repurchase program, underscoring its growth convictions.
Catalysts: VNET has upwardly revised its total net revenues and adjusted EBITDA (non-GAAP) guidance for the full year 2025.
The firm’s Chief Financial Officer, Qiyu Wang, cited impressive Q1 performance and operational and financial momentum as being key drivers of the improved outlook.
It expects revenue to grow by 11%- 13% and Adjusted EBITDA (non-GAAP) to rise by 14%-16%.
Valuation upside: Current VNET analyst price targets run from a low of $5.00 to a high of $20.20. VNET is trading at $8.87, a few dollars below the average analyst target of $12.01.
Technical tailwind: All major moving averages—from 20-day to 200-day—are indicating ongoing bullish momentum.
Other technical indicators further reinforcing the buy signal include a Relative Strength Index (RSI) of 61.692.
If you have a high-risk, high-reward mindset, VNET’s recent breakout, accompanied by follow-through volume, offers a textbook technical entry point.
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A chip supplier poised to fuel U.S. AI manufacturing
A cloud provider set to expand under new policy changes
A data firm with potential government contracts on deck
The early window on these opportunities may be closing — now’s the time to see what’s coming next.
Bear Case
Key risk: VNET has significantly increased its debt levels and future liabilities with an expensive expansion program.
This includes the addition of $747 M in new debt and convertible notes in Q1 2025.
It’s also worth noting that VNET is a Cayman Islands ADR, meaning it’s particularly vulnerable to any escalation in trade and political tensions between the United States and China.
This could manifest as delisting threats and potential sanctions.
Macro/sector headwinds: China’s bruising economic conditions could yet lead to a recession, with growth slowing and a high youth unemployment rate.
A sluggish Chinese economy could lead to a decline in demand for VNET’s services.
The firm also faces stringent regulatory oversight and tight government controls, which could leave it vulnerable to costly compliance measures.
Competitive threat: This segment of the economy is fiercely contested, and VNET faces intense competition from prominent players such as GDS, Alibaba Cloud, and Tencent Cloud.
That intense competition could be felt on the bottom line, with VNET forced to shrink its margins to remain attractive to customers.
Crowded-trade concern: VENT’s ADR structure introduces additional complexity and makes valuation volatile, which can lead to sharp dips and impact investor sentiment.
Quick Checklist
✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (July 15, 2025)
Deep‑Dive Links
That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!
Best Regards,
—Noah Zelvis
Everyday Alpha