GDS raises 2026 sales target past 1GW and lifts capex to $1.4B

GDS Holdings now expects to sign more than a gigawatt of new data center sales in 2026, and it has raised its capex budget to keep pace, according to Data Center Dynamics. On its Q2 earnings call, the Chinese developer lifted its full-year sales target to 1GW, with CEO William Huang pointing to AI demand from the country's tech giants and emerging AI leaders. First-half binding commitments already topped 2GW. Another 600MW was reserved, the company said.

Huang called the year on track for a record sales commitment, well above the original target. The spending plan moved with that forecast. GDS raised its capex guidance for 2026. The new number is $1.4 billion. That is up from $1.3 billion. In absolute terms, $100 million is not much. The direction matters more than the size. The company commits capital when the bookings look real.

The backlog supports the optimism. GDS began the year with 450MW of committed capacity. By the end of Q2, that figure stood at 757MW. The gain was 68 percent in six months. On the earnings call, GDS put an average adjusted-EBITDA estimate of $326,254 per megawatt on the backlog. That is the number that turns a reservation into something an underwriter can model. Run it across the whole book and the potential is roughly $247 million a year of adjusted EBITDA, assuming the average holds.

Q2 financials show the cost side of that equation. Net revenue rose to $455.1 million. That was a 6.5 percent year-over-year gain, and GDS attributed it to data center ramp-ups. Cost of revenue grew faster, reaching $357.2 million. That was a 9.6 percent jump. Gross profit slipped to $97.9 million. That was down 3.6 percent. Gross margin narrowed to 21.5 percent. A year earlier it stood at 23.8 percent. GDS said utility costs took a bigger share of net revenue. Power pricing is the recurring variable that eats into earnings, and this quarter is the evidence.

Capacity under contract is expanding in parallel. Total committed and pre-committed area reached 784,800 square meters at the end of Q2. The figure was 18.2 percent higher than a year earlier. It was also 8.2 percent above the first quarter. That is the denominator for future revenue. The company is filling existing space and signing new space at the same time.

Huang framed the demand as a structural upgrade in computing power and AI infrastructure, driven by China's tech giants and emerging AI leaders. Those are the customers GDS has built its platform around. The first-half bookings show the relationships are converting. They came to more than 2GW of binding commitments. Another 600MW was reserved. For private investors underwriting data center assets, the Chinese market has its own power and contract dynamics. But the core equation is the same as everywhere: contracted EBITDA must cover the build and the electricity bill. GDS's backlog math says the revenue is there. The margin move says the cost pressure is real.

Watch whether GDS holds the $326,254 per-megawatt EBITDA figure as the backlog converts. The raised target assumes AI-driven demand keeps coming at scale. If bookings slow, the capex increase is the first thing to reverse. If utility costs keep climbing, the margin erodes further. Either scenario changes the per-megawatt economics that make this backlog attractive.

The 1GW target, the backlog build and the capex raise all rest on one view: capacity, not demand, is the constraint. The company that builds and fills quickly wins the pricing power. GDS's raise is a bet that it is that company, and the first-half commitments are the evidence.