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In a remarkable market surge on Wedesday, AI chipmaker Cambricon Cambricon Technologies Corp. (688256.SH) has seen its share price skyrocket, briefly surpassing Kweichow Moutai to become China's most valuable stock at a price of 1,464 yuan. Its share price closed at 1,372 yuan, marking a 3.25% increase.

Cambricon's stock has more than doubled this month alone, and its year-to-date gain has now exceeded an astonishing 2,500%, pushing its total market capitalization around 600 billion yuan.

The rally is fueled by a stunning financial report. On the evening of August 26, Cambricon released its semiannual report, revealing a 2025 first-half operating revenue of 2.881 billion yuan, a year-over-year increase of 4,347.82%—a growth rate rarely seen in China's A-share market. Even more significantly, the company swung from a net loss of 530 million yuan in the same period last year to a net profit of 1.038 billion yuan attributable to its parent company.

This explosive growth is no accident. The company's revenue structure shows that its cloud product line generated 2.87 billion yuan, accounting for a dominant 99.6% of total revenue. This indicates that Cambricon has successfully capitalized on the booming demand for AI computing power, with its products demonstrating strong market competitiveness in large-scale model training and inference.

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The report also highlights the company's sustained commitment to R&D, with investments increasing by 2.01% year-over-year. While R&D as a percentage of revenue decreased due to the dramatic revenue growth, it remains a significant 15.85%.

Established in 2016, Cambricon specializes in the R&D of AI chips and core processors. The company's success is aligned with China's broader national strategy. China's State Council, the cabinet, on Tuesday released a guideline on deepening the implementation of the Artificial Intelligence (AI) Plus Initiative to promote the in-depth integration of AI and various industries, vowing to achieve extensive and deep integration of AI with six key areas including sci-tech and consumption by 2027.

Analysts are taking notice. Goldman Sachs recently raised its price target for Cambricon by 50% to 1,835 yuan per share, citing increased capital expenditure in China's cloud computing sector, product diversification, and strong R&D investment. Goldman's analysts also raised the 2025~2027 net profit forecasts for the company by 59%, 28%, and 29%, respectively, to reflect higher AI chip shipments. It's also noted that Cambricon was one of eight companies to pass a recent "DeepSeek" compatibility test, further confirming its R&D capabilities.

Securities firms echo this sentiment. Zheshang Securities points to export controls as a catalyst for local innovation, stating that the long-term trend favors self-reliance and that supportive policies and applications will continue to benefit domestic manufacturers. CITIC Securities also sees a positive outlook, noting that the semiconductor cycle is in an upward trend driven by strong AI demand and a recovery in industrial sectors. They believe Chinese semiconductor firms are poised to benefit significantly from the ongoing development of the AI industry.