Key Takeaways:
Shares of Chinese AI chip designer Cambricon Technologies Corp. (688256.SS) surged more than 17 percent on Tuesday after the company posted first-quarter revenue that more than doubled from the previous year.
"The first-quarter revenue beat expectations, driven by strong shipments of the Siyuan 590 chip," Morgan Stanley analyst Charlie Chan said in a report, noting that a 155% sequential jump in pre-payments suggests a significant increase in new chip production orders.
For the first quarter of 2026, Cambricon reported revenue of 2.885 billion yuan, a 159.56 percent increase from the same period a year earlier. Net profit attributable to shareholders grew 185.04 percent year-over-year to 1.013 billion yuan. The company's strong results were supported by what it described as stable production from its foundry partner, SMIC.
The stock's rally to a new all-time high of 1,599 yuan per share made it the most expensive stock on China's A-share market and was the primary driver behind a 4.7% jump in the tech-heavy STAR 50 Index. The performance highlights growing investor confidence in China's domestic semiconductor industry, which has seen continued export growth despite US trade restrictions.
The bullish sentiment extended to other domestic chip-related companies. Shares of VeriSilicon Holdings (688521.SS) jumped by their 20 percent daily limit after the company reported a 114.47% rise in first-quarter revenue and new AI-related orders totaling 8.24 billion yuan since the start of the year. This stood in contrast to weakness in Hong Kong, where the Hang Seng Tech Index fell more than 1 percent.
The strong results from Cambricon signal that China's efforts to build a self-sufficient semiconductor supply chain are yielding significant results, particularly in the high-demand AI sector. Investors will watch the company's second-quarter earnings to see if the growth momentum can be sustained.
This article is for informational purposes only and does not constitute investment advice.
