DayOne Completes $4.5 Billion Financing; GDS Poised to Leverage It for Accelerated Expansion

Overview

In a recent report, Goldman Sachs notes that DayOne, GDS’s data-center platform, has completed a $4.5 billion Series C financing, significantly boosting its valuation. The funds will be used to accelerate capacity expansion across Asia-Pacific—covering Singapore, Malaysia, Indonesia, Thailand, Japan, and Hong Kong—and Europe—encompassing Finland and Spain. By the end of 2026 and into 2027, DayOne’s committed capacity is projected to grow to 2.2 GW and 3 GW, respectively, up from 1.5 GW as of Q1 2026. Goldman Sachs maintains its earnings forecasts and valuation model for GDS, keeping a Buy rating with a target price of $49 (U.S. shares) and HK$47 (Hong Kong shares). The firm estimates that, by year-end 2026, DayOne will be valued at approximately $16.4 per ADS (about $3.6 billion), roughly half of GDS’s market capitalization. Additionally, DayOne is expected to deliver rapid revenue and EBITDA growth, posting revenues of $1.1 billion and $2.2 billion in 2026 and 2027, respectively, with EBITDA reaching $467 million and $1 billion.

Core views

On June 5, 2026, DayOne announced the completion of its Series C financing, raising a total of $4.5 billion—substantially more than the initially planned $2.1 billion. The round was led by existing investors Coatue and Hillhouse, with participation from new backers including Indonesia’s sovereign wealth fund INA. Following this financing, DayOne’s overall valuation exceeds $11 billion. Goldman Sachs highlights that these funds will primarily support the rapid build-out of DayOne’s data centers across Asia-Pacific—spanning Singapore, Malaysia, Indonesia, Thailand, Japan, and Hong Kong—and in Europe, including Finland and Spain. By the end of 2026 and into 2027, DayOne’s committed capacity is projected to reach 2.2 GW and 3 GW, respectively, marking a substantial increase from the 1.5 GW reported in Q1 2026. Goldman Sachs has maintained its earnings projections and valuation framework for GDS, retaining a Buy rating with a target price of $49 (U.S. shares) and HK$47 (Hong Kong shares). The firm calculates that, by year-end 2026, DayOne will be valued at about $16.4 per ADS (approximately $3.6 billion), equivalent to roughly half of GDS’s market cap. Furthermore, DayOne is anticipated to deliver robust revenue and EBITDA growth, generating $1.1 billion and $2.2 billion in revenue in 2026 and 2027, with EBITDA climbing to $467 million and $1 billion.

Analysis framework

Goldman Sachs employs a sum-of-the-parts (SOTP) valuation methodology to assess GDS’s overall worth, separately valuing its China operations and its stake in DayOne. By projecting DayOne’s future revenue, EBITDA growth, and valuation multiples, the firm derives the implied equity value and incorporates it into GDS’s per-share valuation. Additionally, Goldman Sachs draws on key financial metrics from DayOne’s previous funding rounds—such as pre-money valuations, raise sizes, equity structures, and per-unit capacity valuations—to evaluate how this round impacts the company’s expansion capabilities and financial health. Moreover, by comparing GDS’s valuation in the Chinese market (roughly 9–10x EV/EBITDA), the firm concludes that its overseas assets offer higher growth potential and premium pricing opportunities.

Methodology notes

• Valuation MethodologySOTP Sum-of-the-Parts

  Valuing each business segment separately and then aggregating the results

  Goldman Sachs values GDS’s China operations and its DayOne stake independently before combining them to arrive at the company’s total market capitalization. This approach helps clearly highlight the growth prospects and risk profiles of different business lines.

• Industry/Market Analysis FrameworkSupply-and-Demand Framework

  Assessing how shifts in industry supply and demand affect pricing and profitability

  When analyzing the data-center sector, Goldman Sachs focuses on the alignment between new supply and customer demand to gauge future utilization rates and pricing trends—factors that directly influence DayOne’s revenue growth.

• Valuation MethodologyEV/EBITDA valuation

  The ratio of enterprise value to earnings before interest, taxes, depreciation, and amortization

  Goldman Sachs uses a 23x EV/EBITDA multiple to estimate DayOne’s equity value in 2027—a common tool for valuing mature or high-growth companies.

• Corporate Fundamentals and Financial FrameworkFree cash flow analysis

  Measuring a company’s ability to generate cash after operating expenses and capital expenditures

  Although specific cash-flow figures were not disclosed, Goldman Sachs estimated DayOne’s free-cash-flow potential through EBITDA and capital spending—critical for assessing its capacity for sustained expansion.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• GDS HOLDINGS LTD (GDS.US)

  Parent company, holding approximately 19–20% equity in DayOne

  Strengths

  Leading wholesale data-center footprint in China; robust balance sheet

  Weaknesses

  Slowing growth in China; facing moderate competitive pressures

  Comparison

  Compared to pure-play overseas expansion stocks, GDS benefits from both domestic and international growth opportunities

  Risks

  Underperformance in overseas expansion; customer attrition; rising financing costs

• DayOne (Private)

  Overseas data-center platform controlled by GDS; accelerating expansion post-financing

  Strengths

  Ample funding; rapidly growing committed capacity; strong market demand

  Weaknesses

  Early-stage expansion; profitability yet to be fully validated

  Comparison

  Faster growth trajectory than established players, but accompanied by higher risks

  Risks

  Construction delays; insufficient customer signings; foreign-exchange volatility

Key data

• DayOne Series C Financing AmountUS$4.5 billionA significant increase from the initial target of US$2.1 billion
• DayOne Post-Financing ValuationOver US$11 billionA substantial jump from the US$3.7 billion valuation following the prior Series B round
• GDS Equity Stake19–20%Corresponding to roughly US$2.2 billion in value
• DayOne Committed Capacity (End 2026/2027)2.2 GW / 3 GWA notable increase from the 1.5 GW reported in Q1 2026
• DayOne Revenue Projections (2026E / 2027E)US$1.1 billion / US$2.2 billionSignificant year-over-year growth
• DayOne EBITDA Projections (2026E / 2027E)US$467 million / US$1 billionImproving EBITDA margins

Impact & implications

Goldman Sachs believes that DayOne’s successful financing not only strengthens its capital base but also underpins its rapid expansion across Asia-Pacific and Europe. As demand for cloud computing and artificial intelligence continues to rise, so too will the need for data-center capacity, positioning DayOne well to meet its committed targets. For GDS, its equity investment in DayOne becomes a critical source of value creation, particularly as growth in its domestic China business slows; the overseas segment offers more compelling growth prospects.

Risks

• Lower-than-expected customer occupancy and utilization rates
• Slow growth in overseas revenue and profitability
• Pricing trends in China and overseas falling short of expectations
• Customer churn risk
• Lagging deleveraging progress

What to watch

• DayOne’s construction progress in Asia-Pacific and Europe
• New customer contracts and changes in occupancy rates
• Execution of capital expenditures following the financing
• GDS’s performance in the Chinese market