Chinese GPU developer Iluvatar Core X (09903.HK) surged 30% on April 8 after JP Morgan initiated coverage with an “Overweight” rating and a HK$620 price target, citing significant growth potential in the domestic market.
In its first report on the company, JP Morgan said Iluvatar is positioned to capture more design orders from top Chinese cloud service providers amid supply uncertainty for Nvidia’s products. The bank highlighted Iluvatar’s sufficient supply as a key advantage.
The bank’s HK$620 target price corresponds to a 20x one-year forward price-to-sales multiple. JP Morgan forecasts the company’s revenue will reach 2.95 billion yuan in 2026 and 5.57 billion yuan in 2027, with adjusted profits hitting 731 million yuan that year. This implies a projected compound annual sales growth of 102% between 2026 and 2028.
The bullish rating highlights the growing investor confidence in China's domestic semiconductor sector as a viable alternative to US suppliers. Iluvatar’s product adaptation to existing infrastructure and its use of PD separation technology to improve inference efficiency could accelerate its market share gains in the nation's cloud computing space.
The positive outlook from a major US bank could attract significant institutional investment into Iluvatar. Investors will be watching the company's ability to convert design wins into large-scale deployments with cloud providers through 2026.
This article is for informational purposes only and does not constitute investment advice.
