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A significant scene has re-emerged in the A-share market: Cambricon's stock price has surpassed that of Kweichow Moutai, reclaiming the title of "king of A-shares." On October 24, Cambricon, a leading domestic artificial intelligence chip manufacturer, opened with a strong performance, closing the day at 1,525 CNY/share, up 9.01%, with a market capitalization of approximately 638 billion CNY, once again challenging its historical high. On the same day, Kweichow Moutai fell by over 1%, closing at 1,450 CNY/share.

Analysts from public funds indicate that this shift in investment preferences highlights a transition in the economic structure from traditional heavy asset and export-driven industries to high-tech, high-value-added industries dominated by technological innovation. The rise of technological leaders like Cambricon signifies substantial progress in the transformation from old to new power—reflecting a snapshot of new momentum in the capital market.

It is noteworthy that alongside Cambricon's surge, foreign capital has also shown "special attention." Recently, Goldman Sachs raised its target price for Cambricon to 2,104 CNY/share.

Additionally, in the recent private placement completed by Cambricon, several public funds invested billions to purchase company shares at a discounted price, with these investments currently showing a paper profit exceeding 27% following the significant price increase on October 24.

Cambricon Returns as the "King of Shares" Looking at the longer term, Cambricon's stock price has surged over 130% this year. In August, Cambricon set a historical high at 1,595.88 CNY/share, followed by a correction of more than 20%. However, in this technology-driven market, Cambricon and similar chip stocks have demonstrated resilience, making a renewed push toward historical highs nearly two months later.

It’s important to note that not only domestic investors are buying vigorously; foreign investment banks are also inflating its valuation during Cambricon's climb. Recently, Goldman Sachs raised the target price for Cambricon to 2,104 CNY/share, citing the company's robust performance and maintaining an optimistic outlook, with the 12-month target price now set at 2,104 CNY/share.

Goldman Sachs analysts, including Verena Jeng, highlighted in their report that based on second-quarter performance and expectations of higher AI chip shipments along with lower operating expenses reflecting China's expanding cloud capital expenditure, they have increased their net revenue forecasts for Cambricon from 2025 to 2030. This year's forecast has been upgraded by 34%, the highest among adjustments.

Previously, on August 25, Goldman Sachs raised Cambricon's target price by 50% to 1,835 CNY/share, primarily due to increased cloud computing capital expenditure in China, diversified chip platforms, and higher R&D investments from Cambricon.

From a financial standpoint, the robust performance provides a solid foundation for the bullish stock price. Cambricon's third-quarter report revealed operating revenue of 1.727 billion CNY, a year-on-year increase of 1,332.52%; net profit reached 567 million CNY, turning a profit compared to the previous year. For the first three quarters, revenue was 4.607 billion CNY, up 2,386.38%; net profit for the period was 1.605 billion CNY, also reversing previous losses. Transitioning from being a loss-making stock to the "king of shares," Cambricon is utilizing its steadily improving fundamentals to digest the previously accumulated high valuation amidst the trends of domestic production and the AI wave.

Private Placement Investments Yield Over 27% Many funds have also caught the wave of Cambricon. On October 24, the ETF price increase leaderboard was dominated by themes like "communication equipment" and "sci-tech chips," with the former centering around the communication equipment index led by "Yi Zhongtian," and the latter focusing on the chip concept index led by Cambricon.

Public funds under institutions like Guotai Asset Management, Fortune Investment, and Bosera Fund saw their sci-tech chip ETFs rise over 5%. Related funds such as Sci-tech Venture and Sci-tech Information ETFs also enjoyed similar increases, with the Sci-tech 50 ETF hitting a transaction volume of 5.522 billion CNY.

As of the end of the second quarter this year, 403 funds held shares in Cambricon, accounting for 15.09% of Cambricon's total share capital with approximately 63.01 million shares. Notably, the largest holdings included the Huaxia SSE Sci-Tech 50 ETF, E Fund SSE Sci-Tech 50 ETF, and Harvest SSE Sci-Tech Chip ETF, holding 11.376 million, 8.643 million, and 4.433 million shares respectively, largely comprising major passive funds. In contrast, among actively managed equities, as of the end of the second quarter, Cambricon has become the top holding in over 20 products, including Yingda Flexible Allocation, Fortune New Industries, and Guotou Ruijin Reform, with Cambricon's stock price increasing over 150% in the second half of the year, significantly contributing to these funds' net values.

Additionally, it is noteworthy that Cambricon recently disclosed a private placement announcement, with the participating public fund products currently enjoying considerable gains.

On October 21, Cambricon announced a private placement price of 1,195.02 CNY/share, raising approximately 3.985 billion CNY with about 3.33 million shares subscribed.

This private placement included participation from 13 institutions, among which Guotai Fund led with a subscription amount of 1.208 billion CNY. Notable funds and managers participating in the placement include Jia Shi Emerging Industries managed by Gui Kai, and several funds managed by Liu Gesong and Shi Cheng, including Guangfa Innovation Upgrade, Guangfa Dual Engine Upgrade, and Guotou Ruijin Advanced Manufacturing, among others.

According to estimates, as of October 24, this recently landed "discounted shares acquisition" has already yielded substantial paper gains, with the current stock price having risen over 27.6% from the private placement cost.

A Lively Reflection of New and Old Economic Dynamics Regarding Cambricon surpassing Kweichow Moutai to take the baton as the king of A-shares, a fund manager from East China believes that compared to mature consumer goods leaders like Kweichow Moutai, some funds are beginning to favor technology stocks with greater potential for the future. Especially under the strategic guidance of innovation-driven development, the valuations of tech companies are being reassessed, reflecting that investor preferences are leaning towards emerging industries. This is an opportunity for growth amidst national policy direction and technological breakthroughs. The comparison with Kweichow Moutai essentially weighs past glory against future promise. The capital market is reassessing which industries can better represent the future of the Chinese economy and is unhesitatingly "voting" with substantial investments.

"From a macro perspective, this shift in investment preference highlights the economic structure's transition from traditional heavy-asset, export-driven industries to high-tech, high-value-added industries centered on technological innovation. The rise of tech leaders like Cambricon signifies significant progress in the transformation from old to new drivers of economic growth. This is a vivid reflection of new momentum manifested in the capital market," the fund manager pointed out.

Liu Bin, a fund manager from Harvest Fund, believes the three key investment logics for the semiconductor chip sector are industrial cycles, new opportunities in AI, and domestic replacements. In the short term, the semiconductor chip market may face volatility; however, from a medium to long-term perspective, the trend of the AI industry is like a vast ocean—global powers are igniting a competitive arms race over computing power, and major tech firms are increasing capital investments, indicating that the semiconductor industry may maintain a high level of prosperity with long-term investment opportunities.

On the policy front, the "14th Five-Year Plan" has announced its primary goals, and significant achievements have been made in high-quality development and improving the levels of technological self-sufficiency. The announcement clearly states the objective of "accelerating high-level technological self-reliance and leadership in new quality productive forces" and emphasizes "strengthening original innovation and tackling core key technologies."

Chen Zongchao, a fund manager from Tongtai Fund, analyzed that starting at the beginning of 2025, the number of paid users and tokens for overseas AI companies is rapidly growing month by month, and the AI industry has finally formed a commercial closed-loop from capital expenditure to revenue generation, dispelling market concerns that large model development is merely a money burner. At the same time, the Chinese semiconductor and domestic AI computing power industries are currently "in a state of being fully prepared and just waiting for the wind," and the nation's support policies are just the wind that the industry has long awaited, as Chen Zongchao stated.