Cambrian “retakes” the stock king title as market enthusiasm outweighs the STAR 50 Index adjustment
```
On Friday, Cambricon's stock price strongly rebounded, at one point surpassing 1,520 yuan and reclaiming the A-share "stock king" title. This performance highlights the market's optimistic expectations for the AI industry's prospects, overshadowing concerns about adjustments to the STAR 50 Index's weighting.
On September 12, Cambricon once again challenged for the "stock king" throne, briefly surpassing 1,520 yuan during the session to overtake Kweichow Moutai. Although it closed at 1,488 yuan per share, slightly lower than Moutai's 1,516 yuan per share, a 7.28% gain demonstrated investors' continued enthusiasm.
Previously, Cambricon surpassed Kweichow Moutai for the first time to become the new "stock king" on August 27, and reached a peak of 1,595.88 yuan per share on August 28. Despite facing passive selling pressure brought by the STAR 50 Index weighting adjustment—which analysts estimated could cause over 8 billion yuan of outflows—investor confidence remained unshaken.
At present, Cambricon's price-to-earnings ratio is as high as 521, far exceeding Nvidia's 50 times, but fund managers and analysts believe that the index weighting adjustment is unlikely to stop the broader rise of Chinese AI stocks. Chinese tech stocks have been on an upward trend for 12 months, with the China Securities AI Index up 60% so far this year, far outperforming the 15% increase of the CSI 300 Index.
This round of rebound highlights investors' confidence in China's technological self-reliance and AI industry development, and also provides fresh support for the ongoing bull market in Chinese tech stocks.
Weighting Adjustment Shockwave: Technical Pressure Can't Shake Long-term Trend
The quarterly adjustment of the STAR 50 Index did bring short-term pressure to Cambricon. Because its weighting in the index reached 14.88%, far above the 10% cap, the adjustment following the close on September 12 is expected to lead to related ETF products reducing about 8 billion yuan worth of Cambricon shares.
Fund products tracking the STAR 50 Index have reached a size of 184.5 billion yuan. The weight reduction means related ETF products must sell off more than 9 billion yuan of Cambricon's market value. This mechanical adjustment triggered a 14.45% single-day plunge on September 4, evaporating more than 80 billion yuan in market capitalization.
However, CLSA research analyst Shihao Li stated: "Maybe some investors will take this as a reason to take profits, but I don't think it will affect the long-term trend." Fund managers and analysts generally believe that the weighting adjustment is a routine quarterly operation and will not change the long-term allocation strategy of actively managed funds.
Fundamentals Improvement Supports Valuation Expectations
Cambricon's performance has provided some support for its high valuation. The company's half-year report released last month showed that first-half revenue soared from 64.8 million yuan in the same period last year to 2.9 billion yuan, achieving a net profit of about 1 billion yuan, and is expected to reach full-year revenue of 5 to 7 billion yuan.
Established in 2016 and listed on the STAR Market in 2020, Cambricon is regarded as the "Chinese version of Nvidia." Gavekal Dragonomics analyst Tilly Zhang pointed out: "There is now more optimism that China's AI industry has passed an inflection point and entered a self-sustaining cycle of increasing investment and improved profitability."
Hedge fund manager Xu Qiongna believes that although Cambricon's current valuation is much higher than Nvidia's, its potential rapid growth may support its valuation. China Europe Capital Chairman Abraham Zhang said that investors are torn between hoping that Cambricon can successfully replace foreign AI chips and avoiding speculative bubbles.
China's AI Bull Market Momentum Continues
The Chinese tech bull market has lasted twelve months, and the China Securities AI Index has risen 60% cumulatively so far this year, far outperforming the 15% increase of the CSI 300 Index. The core driving forces of this rally come from policy support, technological breakthroughs such as DeepSeek, and large-scale AI investments by tech giants including Alibaba, Tencent, and Baidu.
Tang Yibing, investment manager of the Bosera STAR 50 Index Fund, believes that the performance of the technology sector depends more on industry trends and profit growth, rather than short-term technical adjustments. As China accelerates technological self-reliance, there remain ample opportunities for investment in key areas such as AI chips.
The global AI boom has driven the Nasdaq—which is heavily weighted toward tech stocks—to hit record highs, fueled by Nvidia's 32% gain. Cambricon has risen 113% so far this year, with most of the gains coming after last month's profit announcement.
Risk Warning and DisclaimerThe market carries risks, and investment must be made cautiously. This article does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable to their particular circumstances. Investments made accordingly are at your own risk. ```