Cambricon Technologies down 11% in Shanghai

Cambricon Technologies down 11% in Shanghai

Chinese artificial-intelligence chip maker Cambricon Technologies experienced a significant drop in its stock price on Friday, September 2, 2025, after the company issued a trading risk warning. The company's Shanghai-listed stock fell by 11% to 1,459.62 yuan, following a surge in its stock price over the past month.

Cambricon Technologies' stock price increase has been remarkable, with the company's stock gaining 134% over the past month and overtaking Kweichow Moutai as China's most valuable stock. The company's rise comes amid a broader market rally in China, with the benchmark Shanghai Composite Index gaining over 6% over the past month and notching a 10-year high earlier this month [1].

The company's warning highlighted potential risks that the stock price may have deviated from current fundamentals, given the current price-to-earnings ratio is over 5000 times, far exceeding the industry level. Cambricon Technologies' first-half revenue grew roughly 44-fold to 2.88 billion yuan, and the company expects its 2025 revenue to be between 5 billion yuan and 7 billion yuan [3].

Cambricon Technologies' stock price decline comes after Goldman Sachs raised its target price on the company by 50% over the weekend to 1,835.00 yuan. However, the company's recent growth has been driven by a significant customer concentration problem, with the top five customers accounting for 94.6% of sales, and one client alone accounting for 79.1% of sales [2].

The company's recent success can be attributed to China's AI push and drive to make chips locally, which has given AI chip designers like Cambricon another push. The launch of local foundation models such as DeepSeek has also contributed to the rising demand for AI inferencing chips [3].

Despite the recent setback, Cambricon Technologies remains a significant player in China's AI chip market, with its AI chip shipment expected to reach 1.09 million in 2028 and 2.33 million in 2030, according to Goldman Sachs estimates [2].

References:
[1] https://www.wsj.com/business/cambricon-technologies-warns-of-trading-risks-after-stock-surges-477d0864
[2] https://wccftech.com/goldman-sachs-forced-to-chase-after-chinas-nvidia-cambricon-as-it-glows-red-hot/
[3] https://www.marketscreener.com/news/cambricon-technologies-warns-of-trading-risks-after-stock-surges-update-ce7c50dcdc88f326