Cambricon drops over 9%, down 20% from recent high

Cambricon drops over 9%, down 20% from recent high

Cambricon Technologies' shares plummeted by over 9% on Monday, September 2, 2025, closing at 1,448.39 yuan, down 20% from its recent highs. The drop in share price comes after a representative from Alibaba Group Holding denied speculation that the e-commerce giant had ordered 150,000 graphics processing units (GPUs) from the Beijing-based AI chip designer. The representative clarified that Alibaba's platform is powered by multiple Chinese-designed GPUs [1].

Cambricon's stock has been at the center of heightened speculation on the mainland, with Goldman Sachs raising its 12-month target price on the stock to 2,104 yuan (US$295). Despite the bullish forecast, Cambricon's share price has declined for two consecutive trading days, reflecting a high divergence of sentiment on the stock. The company's Siyuan 370 AI graphics processing unit has been recognized for its potential to unseat Nvidia as China's top AI chip supplier [1].

The stock's volatility is attributed to excessive speculation, with Cambricon warning about the risks of supply chain disruptions due to US export restrictions. Additionally, the company's stock price has been affected by the presence of short-term speculation, which is a normal phenomenon for key players in the semiconductor sector [1].

Cambricon's shares briefly surpassed those of liquor distiller Kweichow Moutai to become the most expensive stock in China last month. However, on Monday, Moutai's Shanghai-listed shares closed flattish at 1,476.10 yuan, regaining the top position [1].

The company reported a 4,348% year-on-year surge in revenue to 2.88 billion yuan (US$403.8 million) in the first six months of 2025, a record high for the company since it went public in 2020. Analysts predict that Cambricon may achieve its first full-year profit in 2025 [1].

China's State Council issued guidelines for economic and social enterprises to widely adopt AI, boosting the growth prospects of local suppliers of chips, servers, and AI solutions. The Cyberspace Administration of China's scrutiny of Nvidia's H20 GPUs is also expected to expand the market share of domestic chip suppliers [1].

References:
[1] https://finance.yahoo.com/news/chip-designer-cambricon-chinas-little-093000462.html