Kingsoft Cloud's stock plummeted 5.40% during intraday trading on Wednesday, reflecting investor concerns over the company's latest financial performance and sector-wide pressures.

The sharp decline followed the company's report of a widened first-quarter net loss, which increased 8.7% year-over-year to 343.8 million yuan. Despite a 37.2% rise in revenue, the gross margin contracted significantly to 12.8% from 16.2% in the prior-year period, primarily due to accelerated depreciation costs associated with servers and network equipment for its AI computing business.

Further pressure came from substantial capital expenditure of 3 billion yuan in the quarter, which notably depleted the company's cash reserves. Additionally, the broader Internet Services and Infrastructure sector experienced selling pressure, with several peers also trading lower, amplifying the downward move for Kingsoft Cloud.