Q1 results and guidance reaffirmation set the tone

VNET Group (VNET) reported first quarter 2026 results with higher sales than a year earlier but a wider net loss, while also reaffirming full year 2026 revenue guidance in the RMB 11.5 billion to RMB 11.8 billion range.

VNET Group's share price has risen 20.86% over the past month and 10.65% year to date, while the stock’s 1 year and 3 year total shareholder returns of 88.76% and over 7x indicate notable momentum despite recent single day volatility.

If VNET’s recent move has you thinking about where growth and infrastructure intersect, it can be useful to compare with other AI related infrastructure opportunities using our 47 AI infrastructure stocks

With shares up sharply over the past year and analysts’ targets still sitting above the current US$10.08 price, the key question is simple: is VNET still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 36% Undervalued

With VNET Group’s fair value narrative at $15.75 against the last close of $10.08, the current price sits well below what this widely followed framework suggests.

Strong, sustained growth in wholesale data center capacity utilization and demand, especially for AI-driven workloads in regions like Greater Beijing and Yangtze River Delta, positions VNET to benefit from the accelerating digitalization and increased AI/cloud adoption across China, directly supporting higher future revenues and occupancy rates.

Want to see what kind of revenue and margin path could justify that gap to fair value? The narrative leans on faster top line growth, improving profitability, and a richer future earnings multiple. The full set of assumptions spells out how those pieces fit together.

Result: Fair Value of $15.75 (UNDERVALUED)

However, there are clear pressure points to watch, including high leverage with sizeable 2025 to 2027 maturities and heavy data center expansion that could risk oversupply.

Next Steps

With both risks and rewards on the table, how confident are you in the balance of the story? Take a closer look at the 2 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.