Cambricon Shares Drop Despite Forecasted 483% Revenue Surge

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Shares of Cambricon Technologies declined despite the company forecasting a significant surge in revenue for the year, potentially increasing by as much as 483%. As of 2:40 p.m. in Shanghai, the stock was down 6%, trading at CNY1492.90 (approximately USD208.68), after experiencing a drop of up to 10.6% earlier in the day. Since hitting a low on July 24, the stock has surged by 149%, making it the most expensive mainland-listed stock in China, surpassing the liquor giant known for its high valuation, which was up 2.2% at CNY1477.68.

The company expects revenue to increase between 317% and 483%, reaching approximately CNY5 billion to CNY7 billion (around USD701.3 million to USD981.8 million) for the 12 months ending December 31, compared to the previous year. Last year, Cambricon’s revenue jumped 66% to CNY1.2 billion.

These revenue forecasts are preliminary and reflect the company’s management estimates, not binding commitments to investors. The company advised investors and interested parties to consider potential risks when evaluating their investment.

In the first half of this year, Cambricon posted a record profit of CNY1 billion, in stark contrast to a net loss of CNY530 million (about USD74.1 million) during the same period last year. This improvement was driven by increasing demand for semiconductors in China as the nation pushes for greater technological independence. Revenue during this period soared 44 times, reaching CNY2.9 billion.

The company credited its first-half performance to the strength of its AI chip products and expanded technical collaborations with top players involved in large AI models, internet platforms, and various other industries.

China has prioritized semiconductor self-sufficiency, boosting investments in domestic chip design and manufacturing. On August 26, the government released new guidelines to advance the AI Plus initiative, a strategic effort to accelerate AI adoption across multiple sectors. This initiative is expected to further increase demand for domestic AI suppliers such as Cambricon.