(Bloomberg) — China’s top-performing stock in 2024 is expected to see additional tailwinds next year due to the country’s push for greater self-sufficiency in artificial intelligence.
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Shares of AI chip designer Cambricon Technologies Corp. have soared 383% this year, surpassing the benchmark CSI 300 index and pushing its market value to $37 billion. The Shanghai-listed stock even outpaced global AI chip leaders Nvidia Corp. and Taiwan Semiconductor Manufacturing Co.
Cambricon has benefited from investor enthusiasm over China’s increased support for the local technology industry in the face of U.S. trade restrictions. The stock could also benefit from its addition this month to the Shanghai Stock Exchange 50 Index, as funds tracking the large-cap indicator add shares.
“The localization of AI chips has become a big trend,” according to Minsheng Securities Co. Major domestic manufacturers like Huawei Technologies Co. and Cambricon “continue to catch up with foreign leaders” in terms of product capabilities, analysts at the company wrote. company in a press release. note.
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Cambricon, based in Beijing, was founded in 2016 and is still making losses. Demand has increased, however, with sales jumping more than 280% in the third quarter compared to last year. Growth looks set to continue.
Graphics processing unit localization “could see significant growth in 2025,” with Nvidia’s 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 the most, followed by Cambricon, she added.
China’s efforts to produce critical technologies at home have also generated many of China’s other biggest stock gains this year. 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%, outpacing the CSI 300’s 16% gain.
–With help from April Ma.
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