VNET Group stock price target raised to $12 by Morgan Stanley

Investing.com - Morgan Stanley (NYSE:MS) has raised its price target on VNET Group Inc (NASDAQ:VNET) to $12.00 from $10.00 while maintaining an Overweight rating on the stock. The company, with a market capitalization of $2.27 billion, has shown remarkable momentum with a 77.85% return year-to-date, according to InvestingPro data.

The adjustment comes as Morgan Stanley analyst Yang Liu assessed the company’s new order expectations following the resumption of H20 shipments, noting that investors currently have low expectations for second-quarter 2025 orders.

Morgan Stanley indicated that timing new orders remains challenging as hyperscalers will need time to order new chips and resume data center procurement, despite VNET’s solid delivery pipeline of 400-450MW for this year.

The firm acknowledged the possibility of new orders materializing soon but cautioned against excessive optimism with financial results approximately one month away.

Morgan Stanley concluded that the resumption of Nvidia (NASDAQ:NVDA) chipset shipments should help rebuild confidence in orders over the next 6-12 months, while also highlighting the importance of VNET’s ability to meet capacity delivery targets as a potential catalyst for stock re-rating.

In other recent news, VNET Group reported a year-over-year revenue increase of 18% for the first quarter of 2025, reaching Rmb2.25 billion. This figure aligns with consensus estimates and exceeds Jefferies’ expectations by 2% and 6%, respectively. The company’s adjusted EBITDA also rose by 26% year-over-year to Rmb682 million, surpassing both consensus and Jefferies’ forecasts by 4% and 15%, respectively. In addition to these financial results, VNET Group announced a share repurchase program authorized by its Board of Directors, allowing the company to buy back up to $50 million of its American depositary shares. This program will be financed through existing funds and executed in various market conditions.

Furthermore, BofA Securities and Jefferies both adjusted their price targets for VNET Group, lowering them to $11.30 and $15.81, respectively, while maintaining a Buy rating. These adjustments follow the company’s recent financial announcements and performance. These developments provide investors with key insights into VNET Group’s current financial health and strategic initiatives.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.