China’s top stock of 2024 is AI chip designer that bested even Nvidia

BEIJING - China’s top-performing stock of 2024 is expected to see additional tailwinds into 2025 from the nation’s drive for greater self-sufficiency in artificial intelligence (AI).

Shares of AI chip designer Cambricon Technologies have climbed 383 per cent in 2024, topping the benchmark CSI 300 Index and driving its market value to US$37 billion (S$50 billion). The Shanghai-listed stock has even outpaced global AI chip leaders Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC).

Cambricon has climbed on investor enthusiasm over China’s stepped up support for the local tech industry in the face of US trade restrictions. The stock may also benefit from its addition in December to the Shanghai Stock Exchange 50 Index, as funds tracking the large-cap gauge add shares.

“The localisation of AI chips has become a big trend,” according to Minsheng Securities. Top domestic manufacturers like Huawei Technologies and Cambricon “continue to catch up with overseas leaders” in terms of product capabilities, the firm’s analysts wrote in a note.

Beijing-based Cambricon was founded in 2016 and is still making losses. Demand has surged, however, with sales jumping more than 280 per cent in the third quarter compared with the year-ago period. Growth looks poised to continue.

Graphics processing unit localization “could see significant growth in 2025”, with Nvidia market share falling to 50 per cent to 60 per cent from more than 80 per cent in 2024, Citigroup analysts including Karen Huang wrote in a note. Huawei will likely benefit most, followed by Cambricon, she added.

China’s push to produce essential technology at home drove many of the other biggest stock gains in China in 2024 as well. Shares of optical module maker Eoptolink Technology and data provider Range Intelligent Computing Technology Group more than doubled in value. A gauge of AI-related stocks climbed 26 per cent, beating the CSI 300’s 16 per cent gain. BLOOMBERG