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Cambricon Technologies, the artificial intelligence chipmaker dubbed “China’s Nvidia”, tumbled on Thursday as investors took profit from one of the mainland’s most frenzied stock rallies this year.
Shares of the Shanghai-listed company sank as much as 16 per cent before closing 14.4 per cent lower at 1,202 yuan, the steepest single-day decline since January 16. The stock lost 84 billion yuan (US$11.8 billion) in market capitalisation.
The sharp sell-off also erased 6.9 per cent from the benchmark Star Market 50 Index, where Cambricon is the biggest constituent with a 15.4 per cent weighting.
The plunge came two weeks after the company’s shares rose 11.6 per cent on August 25, replacing liquor distiller Kweichow Moutai as the most expensive stock in China. Despite the pullback, Cambricon is still up nearly 83 per cent this year, giving it a market value of 502.8 billion yuan.
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China shows off latest AI innovations at international conference in Shanghai
China shows off latest AI innovations at international conference in Shanghai
The volatility reflects growing wariness that valuations for Chinese hardware and semiconductor firms have run too far ahead of fundamentals, even as Beijing champions AI and domestic chipmaking as strategic priorities.
“Cambricon’s sharp drop reflects market pressure to correct its lofty valuation,” said Dickie Wong, director of the Institute of Securities Dealers. “Despite a sharp gain in 2025, its price-earnings multiple is unsustainable, and a pullback was inevitable.”
