(Bloomberg) — China’s top-performing stocks in 2024 are expected to see additional tailwinds next year due to the country’s push toward greater self-sufficiency in artificial intelligence.
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Shares of AI chip designer Cambricon Technologies Corp. have risen 383% this year, outperforming the benchmark CSI 300 index and lifting its market value to $37 billion. Shares listed in Shanghai have even outperformed global leaders in artificial intelligence chips, Nvidia Corp. and Taiwan Semiconductor Manufacturing Co.
Cambricon has risen on investor enthusiasm over China’s increased support for the local tech industry in the face of U.S. trade restrictions. The stock may also benefit from its addition this month to the Shanghai Stock Exchange 50 Index, as funds tracking the large-cap gauge add shares.
“AI chip localization has become a big trend,” according to Minsheng Securities Co. Major domestic manufacturers such as Huawei Technologies Co. and Cambricon “continue to catch up with foreign leaders” in terms of product capabilities, they wrote. the company’s analysts in a note.
Read more: SMIC’s 120% stock rally, outperforming Nvidia, faces chip war threats
Beijing-based Cambricon was founded in 2016 and is still loss-making. However, demand has increased and sales increased more than 280% in the third quarter compared to the same period a year ago. Growth looks set to continue.
Localization of graphics processing units “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 wrote in a note. including Karen Huang. Huawei will probably benefit the most, followed by Cambricon, he added.
China’s push to produce essential technology at home also fueled many of the other biggest stock gains in China 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 rose 26%, outpacing the CSI 300’s 16% gain.
–With the help of April Ma.
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