Gorilla Technology Group Inc. (NASDAQ: GRRR) experienced a notable decline in its stock price on Friday following its announcement to enter the U.S. AI infrastructure market through a proposed data center acquisition. Currently, shares are trading at $10.95, reflecting an 8.29% decrease.
Details of Proposed Data Center Acquisition
The company has signed a non-binding letter of intent to acquire its first U.S. data center, which will initially offer 6 megawatts (MW) of capacity but has a pathway to expand to approximately 36 MW. The local utility has supported plans for an additional 30 MW of power, expected to come online in about 18 months, contingent upon necessary infrastructure work.
This data center will include colocation operations, supporting electrical and cooling systems, office space, and carrier-neutral connectivity. Gorilla is also considering upgrades to accommodate high-density AI and GPU deployments.
The completion of this acquisition is targeted for the end of November 2026, pending due diligence and the necessary approvals. However, Gorilla has not disclosed the specific location of the data center within the United States.
Investor caution may be influencing the stock drop, mainly due to the non-binding nature of the deal, the lengthy expansion timeline for power, and potential execution risks associated with Gorilla’s planned U.S. expansion.
Expansion Strategy in the U.S.
Gorilla’s proposed acquisition is a crucial component of its broader strategy to enhance its AI infrastructure footprint in the U.S. This strategy includes further acquisitions, infrastructure upgrades, and deployment of AI compute resources based on customer demand. Chairman and CEO Jay Chandan called this initiative “a defining step” in the company’s U.S. expansion.
CFO Bruce Bower emphasized the company’s commitment to acquiring infrastructure that offers both immediate value and expansion potential while adhering to disciplined investment guidelines.
Market Performance and Analyst Projections
Gorilla Technology’s stock performance remains under pressure, trading significantly below its 20-day, 50-day, and 200-day simple moving averages (SMA). Currently, it is almost 20% lower than its 20-day SMA of $13.10 and about 45.61% down compared to a year ago. Trading metrics indicate a weak technical trend, underscored by heavy selling activity.
Analysts predict Gorilla Technology’s next earnings report will be released on November 16, with an expected earnings per share (EPS) of 11 cents—down from 26 cents in the same quarter last year. Revenue forecasts suggest $38.69 million, a rise from $26.48 million year-over-year.
Gorilla carries a Buy consensus rating, with an average price target set at $31.33. Recent coverage reports include Buy ratings from StoneX and B. Riley Securities, each with a $25 price target, along with a $44 target from Compass Point.
