Goldman Sachs has once again raised its target price for Cambricon Technologies Corporation Limited just one week after its previous upgrade, driven by optimism surrounding Chinese cloud service providers' expanding capital expenditure and surging demand for domestic AI chips.

According to market sources, Goldman Sachs analysts Verena Jeng and Allen Chang raised Cambricon Technologies' 12-month target price from 1,835 yuan to 2,104 yuan in their latest report released on September 1, representing a 14.7% increase while maintaining their "Buy" rating. The new target price implies 41% upside potential from the stock's August 29 closing price.

This upgrade follows Cambricon Technologies' strong second-quarter 2025 results. The report indicates that Chinese cloud service giants are accelerating AI infrastructure investments, combined with supportive industrial policies, jointly driving demand for domestic AI chips, from which Cambricon Technologies as a leading company will benefit. Additionally, revenue scale growth and operational efficiency improvements will help enhance the company's operating cost ratios.

In the previous week's report, Goldman Sachs' primary logic for raising the target price was based on increased Chinese cloud capital expenditure, chipset platform diversification (DeepSeek V3.1 specifically tailored for next-generation domestic chip links), and Cambricon Technologies' strong R&D capabilities.

Based on higher AI chip shipment expectations and improved operating expense ratios, Goldman Sachs significantly raised its earnings forecasts for Cambricon Technologies while increasing the 2030 target valuation multiple from 65x to 69x. Goldman Sachs further upgraded Cambricon Technologies' shipment expectations, projecting the company's 2025 AI chip shipments at 145,000 units, up from the previous week's forecast of 143,000 units.

**Cloud Giants' Capital Expenditure Expansion Boosts AI Chip Shipment Expectations**

One core logic behind Goldman Sachs' target price increase is Chinese tech giants' significantly expanded capital expenditure in the AI sector. The report cites data showing Alibaba's second-quarter 2025 capital expenditure reached 39 billion yuan, up 57% quarter-over-quarter and doubling year-over-year. Tencent's capital expenditure during the same period achieved 119% year-over-year growth, both exceeding market expectations.

Driven by this trend, Goldman Sachs raised its forecasts for Cambricon Technologies' AI chip shipments. The report projects the company's AI chip shipments will grow from 145,000 units in 2025 to over 1 million units in 2028, reaching over 2 million units by 2030. Analysts believe that with the launch of Chinese domestic large language models and growing inference demand, domestic chipsets are rising.

In last week's report, Goldman Sachs projected the company's AI chip shipments would grow from 143,000 units in 2025 to 2.1 million units in 2030, representing a 2025-30 compound annual growth rate of 72%.

The report also mentions government policy support. According to cited guidelines from the State Council, clear targets have been set to achieve penetration rates of over 70% and 90% for new-generation intelligent terminals and AI agents across six key sectors by 2027 and 2030 respectively, which will further stimulate investment in AI infrastructure.

**Strong Company Performance with Significant Operational Efficiency Improvements**

Cambricon Technologies' own strong performance provides support for Goldman Sachs' optimistic outlook. The company provided full-year 2025 revenue guidance of 5-7 billion yuan, with a midpoint of 6 billion yuan representing 411% year-over-year growth. Goldman Sachs expects revenue to reach 6.5 billion yuan, within the company's guidance range.

Data in the report shows Cambricon Technologies' fundamentals continue to improve. Growth in contract liabilities reflects the company's sufficient order backlog. More notably, the company's operational efficiency has improved significantly, with "revenue per employee" over the past 12 months increasing from 2 million yuan at the end of 2024 to 5 million yuan as of June 2025.

Goldman Sachs analysts believe Cambricon Technologies' continued R&D investment in both AI chips (covering training and inference) and software (flexible and scalable coding systems) will consolidate its leading position in the domestic market and help expand its customer base from software companies and enterprise clients to more internet companies and leading cloud service providers.

**Raised Earnings Forecasts, Reiterated "Buy" Rating**

Based on higher AI chip shipment expectations and improved operating expense ratios, Goldman Sachs significantly raised its earnings forecasts for Cambricon Technologies. The report increased the company's 2025-2030 net profit forecasts by 11% to 34%:

"We have incorporated second-quarter 2025 results into our analysis and raised 2025-2030 net profit expectations by 34%/21%/19%/11%/11%/11%, primarily due to increased AI chip shipments and lower operating expense ratios, reflecting expanded Chinese cloud computing capital expenditure, supportive AI policies encouraging AI infrastructure investment, the rise of local ecosystems driven by growing inference demand, and Cambricon Technologies' strong second-quarter 2025 performance under strict cost control."

In terms of valuation, Goldman Sachs continues to use a discounted enterprise value/EBITDA (EV/EBITDA) model with 2030 as the valuation benchmark year. Analysts raised the target EV/EBITDA multiple from 65x to 69x, applying it to the upgraded 2030 EBITDA forecast to arrive at the 12-month target price of 2,104 yuan.

After cross-comparing valuations with global peers including NVIDIA and AMD as well as Chinese semiconductor peers, the report notes that despite high valuations, considering high growth expectations, current valuations are not "excessively overvalued."