China’s Top Stock of 2024 Eyes Boost From AI Self-Reliance

(Bloomberg) — China’s top performing stocks in 2024 are expected to see additional headwinds next year from the country’s pursuit of greater self-sufficiency in artificial intelligence.

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Shares of AI chip designer Cambricon Technologies Corp. have soared 383% this year, leading the CSI 300 index and pushing its market value to $37 billion.The Shanghai-listed stock has even outpaced global AI chip leader Nvidia Corp and from Taiwan Semiconductor Manufacturing Co.

Cambricon rose on investor enthusiasm over China’s increased support for the local tech industry amid U.S. trade restrictions.The stock could also benefit from gains in the Shanghai Stock Exchange’s 50 index this month as funds tracking the large-cap gauge added shares.

“The localization of AI chips has become a big trend,” according to Minsheng Securities Co. Leading local manufacturers such as Huawei Technologies Co. and Cambricon “continue to catch up with overseas leaders” in terms of product capabilities, the company’s analysts wrote. Note:

Read more. SMIC’s 120% Nvidia stock rally faces chip war threats

Beijing-based Cambricon was founded in 2016 and is still making losses. Demand has picked up, however, with sales up more than 280% year-on-year in the third quarter, and the growth looks set to continue.

GPU localization “could see significant growth in 2025,” with Nvidia’s market share falling from more than 80% in 2024 to between 50% and 60%, according to analysts at Citigroup Inc., including Karen Huawei is likely to benefit the most, followed by Cambricon, he added.

China’s efforts to produce key technologies at home led to the other biggest gains in China this year, with optical module maker Eoptolink Technology Inc. and data supplier Range Intelligent Computing Technology Co. more than doubling in AI-related stocks rose 26%, outpacing the CSI 300’s 16% gain.

— With the support of April, Ma.

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