Cambricon Technologies Corp (SS:688256) shares soared to a record high on Thursday, extending recent gains amid increasing optimism over Beijing’s promotion of domestically-made artificial intelligence chips.
Bets on Chinese demand were furthered by AI major NVIDIA Corporation (NASDAQ:NVDA) flagging increased uncertainty over sales of its China-specific H20 chip. Nvidia, when reporting its second-quarter earnings on Wednesday, said it had not shipped any H20 chips to China in August despite receiving U.S. government approval to do so.
Nvidia also excluded prospective H20 chip sales from its revenue guidance for the current quarter, but said it expected between $2 billion and $5 billion from Chinese H20 sales if geopolitical uncertainty cleared.
Cambricon shares surged over 7% to a record high of 1,484.02 yuan in Shanghai trade. The stock surged over 100% so far in August, as Beijing displayed increasing scrutiny of Nvidia’s chips, while calling on major Chinese AI developers to use locally sourced chips.
This trend came to a head last week after Chinese AI major DeepSeek said it was developing an updated AI model that is designed to run on Chinese chips.
AI chips have become a contentious topic between the U.S. and China this year, as Beijing largely balked at U.S. restrictions on sales of the technology to the country. Beijing’s recent scrutiny of U.S. chips was reportedly sparked by seemingly insulting comments made about chip sales to the country by U.S. Commerce Secretary Howard Lutnick.
Chinese regulators have also warned domestic firms over “backdoor” controls and security lapses in U.S.-made chips.
Nvidia’s comments on Wednesday added to bets that more Chinese AI developers will switch to locally made chips, of which Cambricon is being positioned as a leading producer.
Cambricon earlier this week reported a record first-half profit of 1 billion yuan ($140 million), while its revenue surged 44-fold.
The company, along with Huawei, Alibaba, and Baidu, was seen leading China’s efforts to build a competitive, locally-sourced AI chip.
But the company’s prospects will still depend on whether Nvidia is able to convince Beijing of the validity of its chips. CEO Jensen Huang said on Wednesday that it was still possible that Nvidia could eventually sell its advanced Blackwell AI chip line in China.
Source :
https://www.investing.com/news/stock-market-news/china-ai-major-cambricon-shares-hit-record-high-as-nvidia-flags-more-h20-doubts-4213765
