Kingsoft Cloud Soars 18%—What’s Fueling This Explosive Rally?

• Kingsoft Cloud (KC) surged 18.45% intraday to $15.06, hitting a session high of $15.17.
• Analysts upgraded ratings to 'Strong-Buy,' with institutional buying surging 4,098% QoQ.
• NVIDIA’s H20 chip export approval and B30 testing catalyzed cloud infrastructure demand.
• Options volume spiked 111%, signaling bullish speculation.

The stock’s meteoric rise reflects a perfect storm of technical momentum, strategic partnerships, and analyst optimism—yet risks linger as the stock challenges resistance near $15.20.

NVIDIA’s Chip Approval Sparks Cloud Infrastructure Demand Surge
Kingsoft Cloud’s 18.45% surge stems from two pivotal catalysts: NVIDIA’s U.S. approval for H20 chip exports and its B30 GPU testing by Chinese tech firms. The B30’s cost-performance ratio—$6,000–$8,500 vs. $10,000–$12,000 for H20—eases Kingsoft’s chip supply constraints, potentially boosting margins after Q2 gross margin guidance was cut to 14%. Analyst upgrades (Nomura’s ‘Strong-Buy’ and a $18.30 target) further fueled momentum, while institutional buying (notably from Millennium Management) amplified volatility. The stock’s 52-week low of $2.02 and PE ratio of -13.74 highlight its undervalued status amid this cloud infrastructure revival.

Cloud Sector Mixed, But Kingsoft Outshines Peers
While Kingsoft Cloud surges 18%, sector leader Amazon.com (AMZN) rises only 0.3%, underscoring the stock’s idiosyncratic drivers. Cloud infrastructure peers like Oracle and IBM face AI infrastructure bottlenecks, while Kingsoft benefits uniquely from NVIDIA’s chip approvals. The sector’s 52-week high volatility contrasts with Kingsoft’s sharp rebound from its $2.02 nadir—a testament to its niche position in China’s cloud market.

Bullish Options and Technicals Signal a Risky Reward Play
• Technical Indicators:
- RSI: 57.36 (Neutral, below overbought 70)
- Bollinger Bands: Above upper band ($13.11), signaling strong upside momentum
- MACD: 0.0108 (Positive histogram, bullish crossover confirmed)
- 50-day MA: $12.70 (well below current price; 200-day MA: $10.94)

Bulls target $15.20 (session high) and $18.30 (analyst target), but resistance near $15.20 could trigger profit-taking. Short-term traders should watch $14.45 (intraday low) as support.

Top Options Picks:
1. KC20250815C15 (Call): Strike $15, expiring August 15. Key stats: Delta 0.56 (neutral-bullish), Gamma 0.10 (high price sensitivity), Theta -0.03 (rapid time decay), Leverage 9.42%. With the stock above strike price, this call captures 138% YTD gains. Payoff at $15.80 (5% upside): $0.80 gain.
2. KC20251121C17.5 (Call): Strike $17.50, expiring November 21. Delta 0.495 (moderate bullish), Gamma 0.052 (moderate sensitivity), Leverage 6.70%. At $18.30 (target), payoff hits $0.80. Both contracts thrive in a sustained rally but face gamma risks if volatility drops.

Trading Hook: Aggressive bulls should buy KC20250815C15 on dips below $15.00; cautious players wait for a $14.50 pullback before entering.

Backtest Kingsoft Cloud Stock Performance
The backtest of Kansas City Bank (KC) after an 18% intraday increase shows mixed results. While the 3-day win rate is 47.84%, indicating a higher probability of positive returns in the short term, the 10-day and 30-day win rates are lower at 44.06% and 46.22%, respectively. This suggests that while KC may experience immediate gains, the likelihood of continued positive performance over longer periods is moderate. The maximum return during the backtest was 0.53% over 30 days, which is relatively modest.

Kingsoft Cloud’s Momentum Faces Crucial Tests Ahead
Kingsoft Cloud’s 18% surge is a triumph of strategic alignment with NVIDIA’s chip advancements and analyst optimism. However, the stock’s high beta (2.10) and reliance on supply chain news create volatility risks. Watch $15.20 resistance and $14.45 support—failure at either could trigger a 10% retracement. With AMZN’s muted 0.3% gain, Kingsoft’s outperformance highlights its niche China cloud play. Investors should prioritize downside stops near $14.50 while targeting $18.30. Final Alert: Fade the rally if NVIDIA’s chip rollout stalls or institutional buying dries up—this is a high-reward, high-risk inflection point.