What happened

Shares of Shanghai-based data center specialist GDS Holdings (GDS -3.58%) tumbled on Friday, declining as much as 13.4%. As of 2:50 p.m. EDT, however, the stock was down 9%.

The tech stock's decline on Friday extends a bearish trend for the stock as pressure on Chinese stocks persists.

A chalkboard sketch of a chart showing a stock price declining.

Image source: Getty Images.

So what

Chinese tech stocks have been battered and bruised in recent months, though they made an attempt at a comeback earlier this week when news broke that famed investor Cathie Wood was buying shares of Chinese tech company JD.com (JD -1.64%). Worries late this week about a slowdown in the real estate market in China, however, snapped a three-day winning streak for China tech stocks. GDS Holdings appears to be getting beat up along with other China tech stocks. E-commerce companies Alibaba Group Holding (BABA -0.39%) and JD.com were both down on Friday, despite the Nasdaq Composite rising more than 1 percent.

Shares of GDS have fallen a total of 31% over the past three months.

Now what

GDS recently announced that second-quarter revenue grew 38.9% year over year. In addition, the company expressed optimism about its expansion plans in Southeast Asia, where it says it believes it is building a foundation to capture "incremental growth opportunities in one of the world's fastest developing digital regions." 

Despite this business momentum, recent events in China are a reminder that investors need to carefully consider the risks of investing in highly regulated markets like China.