SMIC (00981), China's leading semiconductor foundry, saw its stock soar 5.02% during intraday trading on Monday, building on its recent upward momentum. The surge comes on the heels of a positive report from Goldman Sachs, which raised SMIC's H-share target price by 15% to HK$73.1, citing strong prospects in China's IC design and artificial intelligence sectors.

Goldman Sachs analysts expressed optimism about SMIC's future, projecting a 5%-7% quarter-over-quarter revenue growth for Q3 2025. This forecast, along with raised revenue and earnings per share estimates for 2028-2029, is expected to serve as a near-term catalyst for the stock. The investment bank's bullish outlook is primarily driven by expectations that China's IC design demand and AI trends will significantly support SMIC's production volume and average selling prices.

Adding to the positive sentiment, SMIC recently announced plans to issue A-shares to acquire a 49% minority stake in SMIC North. Cathay Haitong Securities noted that this move would further enhance the company's capacity expansion and local-for-local trends. As domestic advanced process technologies continue to evolve and AI chips are expected to shift towards local foundries, SMIC, with its strategic positioning in advanced processes, stands to benefit significantly from the broad domestic substitution opportunities in the AI era.