Cambricon Soars 17% to 1,599 RMB, Becomes Highest-Priced A-Share Stock

Cambricon Surges 17% in a Single Day to Become A-Share Market’s Highest-Priced Stock: Three Structural Shifts Driving the Semiconductor and AI Boom

On the final trading day of April, China’s A-share market witnessed a rare “lightning strike” across tech stocks: Cambricon (688256.SH) surged over 17.3% in one session, closing at RMB 1,599.00 per share—historically breaching the RMB 1,500 threshold and overtaking Kweichow Moutai (which closed at RMB 1,587.50 that day) to become the A-share market’s highest-priced stock. The STAR 50 Index soared 4.71% in just half a trading day—the largest single-day gain in three years. Over 40 core semiconductor and AI-computing stocks—including SMIC, Cambricon, Sugon, and Hygon—hit their daily trading limits; broader tech segments such as commercial aerospace, AIoT, and edge intelligence also experienced sweeping limit-up rallies. This rally is no isolated event-driven spike. Rather, it signals the emergence of a structural bull market—a convergence of three interlocking forces: China’s domestic technological evolution, a paradigm shift in geopolitical security thinking, and the global AI capital-expenditure cycle.

I. Earnings Beat Merely Sparked the Rally—Domestic AI Computing Substitution Has Entered an “Accelerated Realization Phase”

Cambricon’s Q1 2024 financial report revealed year-on-year revenue growth of 218.6%, with net profit attributable to shareholders turning from loss to profit at RMB 127 million—far exceeding the consensus market expectation of RMB 68 million. More critically, its revenue mix underwent a qualitative transformation: smart chip business accounted for 89% of total revenue, with shipments of the MLU370 series—designed specifically for large-model training and inference—rising over 300% quarter-on-quarter. Customers now include all three major telecom operators, leading internet firms, and national-level intelligent computing centers. This marks a pivotal transition for domestic AI chips—from “technically viable” to “operationally robust and scalable.” Notably, China’s National Development and Reform Commission (NDRC) recently designated “advanced computing equipment upgrades” as the top priority among eight key areas supported by the 2024 ultra-long-term special treasury bonds. Of the initial RMB 200 billion in equipment-upgrade funding, approximately 35% is earmarked explicitly for domestic substitution in computing infrastructure. Policy has shifted from “encouraging substitution” to “mandating substitution backed by real fiscal subsidies,” dramatically enhancing order visibility for industry leaders like Cambricon. Consequently, valuation anchors are migrating from “technical feasibility” toward “commercial certainty.”

II. Geopolitical Security Logic Evolves: From Supply-Chain Resilience to Technological Sovereignty

This rally coincided precisely with a sudden escalation in Middle East tensions: the U.S. military’s planned first-ever combat deployment of the “Dark Eagle” hypersonic missile; disruptions to shipping through the Strait of Hormuz; and Brent crude futures surging past USD 126 per barrel—the highest since March 2022—driving up geopolitical risk premiums. Against this backdrop, investor perceptions of “technological self-reliance” have undergone a fundamental shift. Previously focused on sanctions-avoidance and “supply-chain resilience,” the emphasis has now pivoted to building independent digital ecosystems—i.e., asserting “digital sovereignty.” SMIC rose over 6% intraday; Hua Hong Semiconductor gained nearly 4%—reflecting strong market confidence in the security of mature-node foundry capacity. Cambricon’s share price breaking the RMB 1,000 mark, however, represents a strategic revaluation of China’s authority to define foundational AI architecture. As global AI computing competition evolves into a full-stack contest spanning “chips–frameworks–models–applications,” Cambricon’s proprietary instruction set, compiler, and ecosystem toolchain endow it with strategic value far exceeding conventional financial metrics. This elevated security logic is reshaping the TMT sector’s valuation framework: P/E ratios are losing weight, while P/S ratios, R&D capitalization rates, and domestic substitution rates—“security coefficients”—are gaining significant prominence.

III. Global AI Capex Cycle Converges: China Transitions from “Catcher-Up” to “Rule Participant”

From a global perspective, this rally is deeply synchronized with the worldwide AI infrastructure boom. According to IDC’s latest forecast, global AI server shipments will grow 38% year-on-year in 2024, with total capital expenditures reaching USD 120 billion—of which China’s share rises to 32% (up from just 19% in 2022). Crucially, NVIDIA’s H20 chip is accelerating adoption in China—but its performance restrictions are spurring domestic vendors to develop “functional alternatives.” For instance, Cambricon’s MLU370 achieves a power efficiency of 1.8 TOPS/W in large-model inference scenarios—12% higher than the H20. Huawei’s Ascend 910B delivers 92% of the A100’s performance in training workloads. This signals a decisive shift in China’s AI computing development path—from “import dependence → restriction-induced urgency → indigenous breakthrough” to “dual-track parallelism → localized leadership → standards export.” Even as both the European Central Bank and the U.S. Federal Reserve signal sustained high interest rates to curb inflation—and global liquidity tightens—capital is flowing contrarianly into Chinese tech equities. This underscores that “hard tech” assets have become scarce: their growth potential no longer hinges on monetary easing but is instead rooted in relentless technology iteration and the inexorable demand for domestic substitution.

IV. Valuation Framework Reconstructed: A Paradigm Revolution—from “Consumer Electronics Mindset” to “Infrastructure Mindset”

Historically, A-share tech valuations have been heavily influenced by the volatile consumer-electronics cycle—resulting in sharp swings and limited sustainability. Cambricon’s ascension to the highest-priced stock, however, signifies a fundamental re-pricing based on the “digital-economy infrastructure” lens—akin to how telecom operators were valued in the early 2000s for stable cash flows, or how high-speed rail networks were priced in the 2010s on long-term ROIC (return on invested capital) expectations. AI computing is now being treated as the “electric grid” of the new era. Cambricon’s RMB 1,599 share price implies a 2024 P/S ratio of 28x—higher than the global peer average of 19x—but justified by its 37% share of intelligent computing-center tenders (per CCID Q1 data) and 100% coverage of “domestically developed chips prioritized” clauses in government cloud procurement. This premium reflects market recognition of the “digital infrastructure license value.” As the STAR 50 Index’s 4.71% half-day surge lifted the entire TMT sector’s P/B ratio to a new median of 4.2x (up 23% from year-start), a new valuation triad has crystallized—one anchored in technology barriers, domestic substitution rate, and policy certainty.

This eruption is no fleeting theme-based speculation. It is simultaneously a milestone in Cambricon’s own commercialization breakthrough—and a defining footnote in China’s broader technological journey: a leap from “technology follower” to “ecosystem architect” under dual constraints of security and development. When the crown of “A-share market’s highest-priced stock” passes from luxury consumer goods to AI chips, the value coordinate system of China’s equity market has quietly—and profoundly—been reset.