SHANGHAI: China’s top-performing stock of 2024 is expected to see additional tailwinds into next year from the nation’s drive for greater self-sufficiency in artificial intelligence (AI).
Shares of AI chip designer Cambricon Technologies Corp have climbed 383% this year. This has topped the benchmark CSI 300 Index and driving its market value to US$37bil.
The Shanghai-listed stock has even outpaced global AI chip leaders Nvidia Corp and Taiwan Semiconductor Manufacturing Co.
Cambricon has climbed on investor enthusiasm over China’s stepped up support for the local tech industry in the face of US trade restrictions.
The stock may also benefit from its addition this month to the Shanghai Stock Exchange 50 Index, as funds tracking the large-cap gauge add shares.
“The localisation of AI chips has become a big trend,” according to Minsheng Securities Co.
Top domestic manufacturers like Huawei Technologies Co and Cambricon “continue to catch up with overseas leaders” in terms of product capabilities, the firm’s analysts wrote in a note.
Beijing-based Cambricon was founded in 2016 and is still making losses.
Demand has surged, however, with sales jumping more than 280% in the third quarter compared with the year-ago period.
Growth looks poised to continue.
Graphics processing unit localisation “could see significant growth in 2025,” with Nvidia market share falling to 50% to 60% from more than 80% in 2024, Citigroup Inc analysts including Karen Huang wrote in a note.
Huawei will likely benefit most, followed by Cambricon, she added.
China’s push to produce essential technology at home drove many of the other biggest stock gains in China this year as well.
Shares of optical module maker Eoptolink Technology Inc. and data provider Range Intelligent Computing Technology Group Co more than doubled in value.
A gauge of AI-related stocks climbed 26%, beating the CSI 300’s 16% gain. — Bloomberg
