(Bloomberg) — China’s top-performing stock for 2024 is expected to see additional tailwinds next year from the country’s drive to become more self-sufficient in artificial intelligence.
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Shares of Cambricon Technologies Corp., a designer of artificial intelligence chips, have risen 383% this year, topping the benchmark CSI 300 index and pushing its market value to $37 billion. Shanghai-listed shares overtook global AI chip leader Nvidia Corp. Taiwan Semiconductor Manufacturing Company.
Cambricon rose on investor enthusiasm about China’s increasing support for its domestic technology industry in the face of US trade restrictions. The stock may also benefit from being added this month to the Shanghai Stock Exchange 50 Index, as funds that track the large-cap measure add shares.
“The localization of AI chips has become a big trend,” according to Minsheng Securities Co., Ltd. Major domestic manufacturers such as Huawei Technologies Co. Cambricon is “catching up with overseas leaders” in terms of product capabilities, company analysts wrote in a report. Note.
Read more: Nvidia stock surges past 120% of SMIC faces chip war threats
Beijing-based Cambricon was founded in 2016 and is still making losses. However, demand is up, with sales jumping more than 280% in the third quarter compared to the same period last year. Growth appears set to continue.
GPU localization “may see significant growth in 2025,” with Nvidia’s market share falling to 50%-60% from more than 80% in 2024, Citigroup Inc analysts, including Karen Huang, wrote in a note. She added that Huawei is likely to benefit the most, followed by Cambricon.
China’s push to produce core technology at home has led to many of China’s other biggest stock gains this year as well. Shares of optical module maker Eoptolink Technology Inc. have doubled in value. and data provider Range Intelligent Computing Technology Group Co., Ltd. A gauge of AI-related stocks rose 26%, outpacing the CSI 300’s 16% gain.
–With help from April Ma.
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