VNET Group (VNET) is back in focus after Jefferies reiterated its positive view, describing the company as a key AI data center play in China and highlighting new power capacity along with potential large hyperscaler contracts.

The latest Jefferies commentary has landed on a stock that already has strong momentum, with VNET’s 7 day share price return of 38.64% and 90 day share price return of 59.43% sitting alongside a 3 year total shareholder return of 193.51%, even though the 5 year total shareholder return shows a 64.93% decline.

If the AI data center theme interests you beyond VNET, it could be worth scanning our list of 34 AI infrastructure stocks as a way to spot other names positioned around similar trends.

With VNET trading at US$14.03, sitting near analysts’ average target and showing an implied intrinsic discount, the key question is whether there is still mispricing here or if the AI data center story is already fully reflected in the stock.

Most Popular Narrative: 6.9% Undervalued

VNET Group’s most followed narrative pegs fair value at about $15.07 per share, a touch above the recent $14.03 close, and ties that gap to long term data center growth and financing plans.

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.

Curious what has to happen for that fair value to hold up? Revenue needs to keep compounding, margins need to move up, and the future earnings multiple stays punchy. The full narrative lays out the numbers behind that path.

Result: Fair Value of $15.07 (UNDERVALUED)

However, the story could still be knocked off course if heavy data center capex meets softer AI demand, or if high leverage and upcoming debt maturities pressure refinancing.

Build Your Own VNET Group Narrative

If you look at these assumptions and feel they miss something, or just prefer to rely on your own work, you can build a fresh narrative in a few minutes and shape it around your view, Do it your way.

A great starting point for your VNET Group research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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• Target potential bargains by checking companies that appear mispriced on fundamentals in our 55 high quality undervalued stocks.
• Focus on income potential by scanning higher yielding names that feature in our 16 dividend fortresses.
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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.