Is VNET a good stock to buy? We came across a bullish thesis on VNET Group, Inc. on Valueinvestorsclub.com by cable888. In this article, we will summarize the bulls’ thesis on VNET. VNET Group, Inc.'s share was trading at $8.45 as of March 27th. VNET’s forward P/E was 23.58 according to Yahoo Finance.

VNET is China’s leading carrier-neutral data center operator, strategically transitioning from traditional retail Internet Data Centers (IDCs) to high-growth wholesale IDC operations, positioning itself to benefit from China’s accelerating AI adoption. The company currently holds an 11% market share in the Chinese IDC market, strengthened by exclusive partnerships with Microsoft Azure and Microsoft 365 in China, as well as backing from global investors like Blackstone.

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As of 3Q25, VNET had 783MW of wholesale capacity, achieving 80% revenue growth in the segment, and is targeting 400MW of new deliveries in 2026 with approximately 90% customer commitments. Its rapid time-to-market, proven execution, and disciplined contract approach support high utilization rates above 80%, giving the company a competitive advantage in meeting AI hyperscaler demand.

China’s AI expansion, while historically constrained by US export restrictions on advanced chips, is gaining momentum through domestic chip development from companies like BABA, BIDU, Huawei, Moore Threads, Cambricon, and Kunlun. VNET has adopted a multi-chip strategy to leverage these domestic GPUs for AI inferencing, ensuring continuity in capacity expansion despite hardware limitations, while any future relaxation of US chip restrictions would further enhance growth prospects.

Financially, VNET trades at roughly a 30% discount to its closest Chinese peer, GDS, with wholesale IDC revenue projected to grow 57% in 2026 and total revenue expected to reach RMB 11,656 million. EBITDA margins are forecast to expand to 35.5%, reflecting operational efficiency and high-margin growth. With accelerating orders, AI-driven demand, and a potential re-rating, upside could exceed 40%, though risks include slower-than-expected AI adoption and competitive pressures. Overall, VNET offers a compelling investment opportunity anchored by its execution track record, strategic positioning, and exposure to China’s AI proliferation.

Previously, we covered a bullish thesis on International Business Machines Corporation (IBM) by Magnus Ofstad in December 2024, which highlighted IBM’s transition to autonomous AI agents, the strategic potential of its watsonx.ai platform, and renewed investor optimism amid a mature tech landscape. IBM’s stock price has appreciated by approximately 3.20% since our coverage. cable888 shares a similar view but emphasizes VNET’s rapid expansion in China’s wholesale data center market and AI-driven growth opportunities.

VNET Group, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held VNET at the end of the fourth quarter which was 33 in the previous quarter. While we acknowledge the potential of VNET as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

Disclosure: None.