Cambricon‘s stock is on fire, and the company’s soon to become the hottest creature in China’s artificial intelligence (AI) chipset sector. The company’s stock has soared — and caught the attention of Wall Street — prompting Goldman Sachs to double down on its bullish outlook. But beneath the euphoria, serious perils remain.
Once derided as the “king of losses,” Cambricon Technologies, which is also known locally as Hanwuji, has scripted a comeback story. Two of its funds were disposed of, but for its main fund — which had a 6 billion yuan valuation — what had brought it back from the brink was the US’s imposition in 2024 of licensing restrictions on the sale of NVIDIA and AMD GPUs to China, after years of combined losses totalling nearly 5 billion yuan ($970 million). This abrupt policy change allowed domestic chipmakers an opportunity, and ever since that day, Cambricon stock has skyrocketed.
A Turnaround Tale Fueled by AI Demand
Cambricon revenue shot up 4,348 per cent to $402 million in the first half of 2025, sparking a frenzy in equities. Investors have greeted this hyper-growth with open arms, sending shares of Cambricon up 130 percent in two weeks. The company’s market capitalization is now more than $90 billion, nearly 70 percent of SK Hynix’s market value, despite the fact that its sales are far smaller than those of the South Korean giant.
Goldman Sachs is taking notice and has raised its stock price target of Cambricon for the second time in two weeks to 2,104 RMB. The bank estimates shipments of Cambricon’s custom-built AI chips will reach 145,000 units in 2025, and volumes will exceed 2.3 million by 2030.
Cambricon’s Siyuan 590: The Chinese Respond To NVIDIA
The revamped AI chip A big part of the bullish case around Cambricon stock is the Siyuan 590, the company’s revamped AI chip. At about 90% of the A100 performance (TPP 4,493 versus 4,992), the Siyuan 590 is emerging as a part of China’s AI hardware landscape. For a number of domestic companies constrained by US export bans, the chips of Cambricon provide a necessary alternative.
Challenges That Could Derail Cambricon Stock
But Cambricon stock remains subject to serious risks despite the hype. ByteDance accounts for about 80 percent of the company’s revenue, making it subject to a chronic customer concentration problem. A retreat from ByteDance could badly crimp revenues.
Competition is another pressing threat. Huawei and Alibaba also have deep pockets and strong R.&D. teams, and are voraciously chasing their own A.I. chips. Cambricon might have a hard time keeping a lead against such deep-pocketed competition.
Can Cambricon Stock Keep Rising?
But for now, Goldman Sachs is still bullish, with further upside ahead as AI gains traction in China. But analysts caution that Cambricon’s stock is priced at bubble-like levels, with its market value running well ahead of fundamentals. The direction of travel is likely to depend on the company’s ability to diversify its customers and maintain pricing.
FAQ
Cambricon jumped by the daily 130% limit after China demand took off for AI chips, driven by US crackdowns on NVIDIA and AMD as well as Goldman Sachs raising its target again and again.
The Siyuan 590 offers some 90% of the performance of NVIDIA’s A100 GPU, so it represents a competitive domestic alternative for Chinese firms.
Primary Risks: The AI GPU seller relies too much on ByteDance for its earnings and faces competition in the AI GPU sector from Huawei and Alibaba.
Cambricon stock has propelled the company’s market cap to more than $90bn mid-way through 2025.
