A research report from Goldman Sachs has once again ignited market enthusiasm for Cambricon Technologies Corporation Limited, China's leading domestic AI chip company.

On August 24, Goldman Sachs released its latest research report, substantially raising Cambricon Technologies' 12-month target price by 50% from 1223 yuan to 1835 yuan, while maintaining a "buy" rating. This implies a potential upside of 47.6%.

Goldman Sachs believes that the company's long-term growth prospects are promising, driven by increased capital expenditure from Chinese cloud service providers, supply chain diversification efforts, and Cambricon Technologies' enhanced R&D investment commitment. The firm's sophisticated valuation model looks ahead to 2030, with its core logic centered on a market revaluation of China's AI supply chain as a whole.

This raises the market's most pressing question: how did Goldman Sachs derive this seemingly striking target price through a valuation model focused on six years into the future? The firm noted that the new target price of 1835 yuan implies a 2030 forward P/E ratio of 44x or 2030 forward EV/Sales of 9x. In a bull case scenario, Cambricon Technologies' stock price could even reach 3934 yuan.

Three Key Catalysts Supporting Optimistic Outlook

Goldman Sachs' optimistic assessment is built on three core driving factors.

First is the surge in domestic cloud providers' capital expenditure. The report cites data showing Tencent's capital expenditure increased 119% year-over-year in Q2 2025. Based on this, Goldman Sachs has raised its capital expenditure forecasts for China's cloud market, believing this will directly benefit upstream AI chip suppliers.

Second, supply chain diversification trends are creating opportunities for domestic chip manufacturers. The report points out that iterations of domestic large language models like DeepSeek are adapting to next-generation domestic chips, helping customers reduce dependence on single suppliers amid tariff uncertainties and data security concerns, thereby creating market opportunities for domestic manufacturers like Cambricon Technologies. According to the report, Cambricon Technologies has passed DeepSeek compatibility testing through the China Academy of Information and Communications Technology, validating its R&D capabilities.

Finally, Cambricon Technologies' commitment to R&D investment has been confirmed. The report mentions that the company's directed share issuance plan to invest 4.5 billion yuan over the next three years for AI chip and software R&D has been approved by the Shanghai Stock Exchange, demonstrating the company's firm commitment to technological innovation. This translates to approximately 1.5 billion yuan in annual R&D investment, higher than the 1.2 billion yuan in 2024.

Valuation Methodology: How Goldman Sachs Calculated 1835 Yuan

The market is most interested in the calculation process behind the 1835 yuan target price. Goldman Sachs did not use conventional near-term P/E valuations this time, but instead chose a more forward-looking discounted EV/EBITDA model, or "discounted forward valuation method."

Specifically, Goldman Sachs analysts did not focus on Cambricon Technologies' profitability data for recent years, but set the valuation benchmark year at 2030. The report explains that by then, Cambricon Technologies' EBITDA margin is expected to reach 22%, making it more comparable to the profitability levels of global peers like NVIDIA and AMD.

The target multiple applied to 2030 EBITDA was raised from the previous 49x to 65x. Goldman Sachs explains that this increase reflects "market revaluation of China's AI supply chain." The basis for this is that the ratio of "EV/EBITDA multiples to next-year fundamentals (EBITDA growth rate and profit margins)" for leading Chinese semiconductor peers has risen from 1.1x to 1.5x.

Discounting to current value: The 2030 target enterprise value calculated through the above method is discounted back to 2026 using a 12.7% cost of equity, then combined with the company's cash and debt situation to arrive at the final target price of 1835 yuan per share.

Multi-Dimensional Cross-Validation: Is the Valuation Too High?

To verify the reasonableness of its valuation, the report conducted multi-dimensional cross-checks and concluded that the valuation is "not excessive":

Enterprise Value/Sales (EV/Sales): The target price of 1835 yuan corresponds to 9x 2030 EV/Sales, lower than the company's trading range since 2022 (22x-61x), and within the trading range of global peers, with NVIDIA at 15x 2026E EV/Sales and AMD at 7x 2026E EV/Sales.

Price-to-Earnings (P/E) Check: The target price corresponds to 253x 2026 P/E and 44x 2030 P/E. After comparing growth rates with Chinese semiconductor peers, the report similarly considers the valuation to be within a reasonable range.

Goldman Sachs also provided valuations under different scenarios. In the most optimistic "bull case scenario," if Cambricon Technologies' chip shipment volume achieves a compound annual growth rate of approximately 90%, its target price could reach as high as 3934 yuan. In the "bear case scenario," if shipment growth slows, the target price could fall back to 1211 yuan.

Bull Case Scenario (Target Price 3934 yuan): Assumes 2025-2030 AI chip shipment volume compound annual growth rate reaches approximately 90%, to 3.5 million units.

Bear Case Scenario (Target Price 1211 yuan): Assumes 2025-2030 AI chip shipment volume compound annual growth rate drops to approximately 60%, to 1.3 million units.