On the afternoon of August 27, a historic moment unfolded in China’s A-share market. The domestic AI chip leader Cambricon’s stock surged nearly 10%, reaching a peak of RMB 1,464.98 per share (approx. $201.47), officially overtaking the long-reigning champion Kweichow Moutai (RMB 1,460.44 per share, approx. $200.91) to top the A-share stock price rankings, earning the new title of “Stock King.” This marks a major shift in the structure of the A-share market — from traditional consumer giants to tech innovation enterprises, the transfer of the crown reflects a profound transformation in market investment philosophy.
Cambricon’s Ascent to the Throne: A Reversal Story
Cambricon’s rise to the top is nothing short of a comeback. From doubling in price on its IPO day in 2020 and surpassing RMB 200 ($27.51) per share, to falling below RMB 100 ($13.76) in 2021, and then starting to climb again in 2024, the stock’s trajectory has resembled a roller coaster.
In June 2024, Cambricon’s stock hovered around RMB 200 ($27.51). By year-end, it had risen to around RMB 600 ($82.53). Recently, the surge has been especially steep.
From July 25 to August 26, Cambricon’s share price soared by 121.42%. On August 22, it broke through the RMB 1,000 ($137.55) mark, and its market cap exceeded RMB 500 billion (approx. $68.77 billion).
Since the rally began on July 11, Cambricon’s cumulative stock price increase has reached 161.38%, with total market capitalization climbing from RMB 219 billion ($30.12 billion) to over RMB 600 billion ($82.53 billion).
Explosive Performance: A Staggering 4347% YoY Growth
Behind Cambricon’s soaring stock price is a stunning performance boom. According to Cambricon’s 2025 semi-annual earnings report, the company achieved operating revenue of approximately RMB 2.881 billion ($396.16 million) in the first half of the year, representing a year-on-year growth of 4347.82%.
Even more astonishing, the company successfully turned profitable, posting a net profit of RMB 1.038 billion ($142.70 million), compared to a loss of RMB 533 million ($73.30 million) in the same period last year — an outstanding performance that is rare even in the history of A-shares.
Cambricon stated that the substantial growth was primarily driven by the continuous rise in demand for AI computing power. With its core technological advantages in AI chips, the company has strengthened technical collaboration with top players in frontier sectors such as large models and the internet, accelerating its business expansion.
Institutions Bullish: Goldman Sachs Sets Price Target at RMB 1835
Cambricon’s remarkable performance has drawn the attention of top investment banks. Goldman Sachs recently released a report raising its price target for Cambricon from RMB 1,223 ($168.14) to RMB 1,835 ($252.27), a 50% increase.
Goldman Sachs explained that the upward revision was due to increased capital expenditure by Chinese cloud service providers — for instance, Tencent’s Q2 capex rose 119% year-on-year. Additionally, chip platforms are becoming more diversified, as evidenced by DeepSeek launching version V3.1 designed specifically for next-generation domestic chips.
Some institutions have even given a peak target price of RMB 3,934 ($540.79). Investment firms generally believe Cambricon’s market cap potential can be benchmarked at 2% to 5% of NVIDIA’s valuation, corresponding to an estimated valuation range of RMB 600 billion to RMB 1.5 trillion (approx. $82.53 billion to $206.33 billion).
Domestic Substitution: Opportunities and Challenges in the AI Chip Market
Cambricon’s rise is set against the backdrop of a broader narrative: domestic substitution in AI chips. In 2025, China’s AI chip demand is projected to reach $39.5 billion, with 37% supplied by domestic vendors.
The U.S. ban on NVIDIA’s H20 chip once slashed its 2025 sales by approximately $16.8 billion. Although H20 sales later resumed, with the contribution of the new B30 chip and supplementation by AMD and domestic vendors, the total supply stands at about $37 billion, still leaving a $2.5 billion gap.
Thanks to strong product capabilities, Cambricon continues expanding its market share. Its Siyuan 590 chip targets the inference market and is expected to ship 150,000 units to ByteDance in 2025, potentially generating revenue exceeding RMB 10 billion (approx. $1.38 billion).
In terms of performance, while domestic chips still lag behind NVIDIA’s top-tier models, they are competitive with the versions sold to China and enjoy cost advantages in inference scenarios.
Risks Lurk Beneath: Bubble Concerns Under Sky-High Valuations
Amid the cheer, risks cannot be ignored. Cambricon is currently trading at a sky-high price-to-earnings (P/E) ratio of 343x — far above the bounds of conventional valuation models.
The company’s operating cash flow remains negative, at -RMB 1.618 billion (-$222.60 million) in 2024, deteriorating further in Q1 2025 to -RMB 1.399 billion (-$192.41 million). Cash on hand plummeted from RMB 1.972 billion ($271.44 million) at the end of 2024 to RMB 638 million ($87.83 million), enough to cover only about two months of R&D expenses.
At the same time, the company’s inventory level has risen sharply, reaching RMB 2.755 billion ($379.20 million) by the end of Q1 — a 55% increase from end-2024. While rising inventory typically signals proactive stocking for future orders, whether it can be absorbed remains to be seen.
Customer concentration is also a concern. In 2024, revenue from the company’s largest customer accounted for 79.15% of total sales, indicating an overly high dependency on a single client.
The “Moutai Curse”: A Repeating Cycle for 1,000-Yuan Stocks
There has long been talk of a “Moutai Curse” in China’s A-share market — historically, every stock that challenged Moutai’s throne above RMB 1,000 has ended in disaster.
Feilo Acoustics once traded at RMB 3,550 ($488.30), now it’s only RMB 3.7 ($0.51). Stone Technology, Aimeike, and Hemai shares all once stood beside Moutai shouting, “Big bro, wait for me,” but none caught up — instead, they all fell into the pit.
Summed up in one sentence: Moutai is like Xie Xun in the A-share market, and all others are trying to test the Dragon-slaying Saber.
Can Cambricon break this curse? Market opinions are sharply divided. Optimists believe Cambricon represents a breakthrough in domestic chips, enjoying the dual benefits of an AI computing boom and domestic substitution.
Cautious voices, however, warn that Cambricon’s high valuation may be over-leveraging its future. If earnings growth slows, the stock price could face a sharp correction.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.