Goldman Sachs raises VeriSilicon's target price: AI orders in hand provide support for accelerated future growth, revenue forecast raised.

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VeriSilicon Holdings is ushering in a new round of accelerated growth. On September 12, Goldman Sachs released its latest research report, raising VeriSilicon’s 12-month target price from RMB 193 to RMB 220 and maintaining a “buy” rating, reflecting the company’s continued strong growth momentum driven by AI orders.

The core driver of this optimistic forecast stems from the robust growth of the company’s orders in the AI computing sector. From early July to mid-September, VeriSilicon recorded an 86% year-over-year surge in new orders, boosting total orders on hand to RMB 3 billion, 64% of which comes from the AI computing segment, laying a solid foundation for future performance releases.

It is also noteworthy that, according to Shanghai Securities News, on the evening of September 11, VeriSilicon plans to acquire a 97.0070% stake in China’s leading RISC-V IP supplier Nuclei Technology by issuing shares and paying cash, after which Nuclei Technology will become its wholly owned subsidiary. This acquisition aims to fill VeriSilicon’s crucial gap in the CPU IP field, establish a more complete full-stack heterogeneous computing IP platform, and further enhance the design flexibility and market competitiveness of its AI ASIC business.

Goldman Sachs uses a 2029 P/E multiple of 46x for discounted valuation of VeriSilicon, raising the target price to RMB 220, nearly 20% above the current stock price. Goldman Sachs also raised its net profit forecasts for VeriSilicon from 2027 to 2030, with the largest increase being 7%. However, due to increased R&D investment, the 2025 profit forecast has been revised from RMB 139 million net profit to RMB 18 million net loss. Even so, the company’s prospects for long-term expansion remain positive, with the compound profit growth rate for 2026-2030 expected to remain high.

AI Orders Soar, Large Backlog Provides Strong Support

VeriSilicon’s recent surge in orders shows that AI demand is becoming the company’s most important growth driver.

According to the company announcement, new orders in the third quarter of 2025 grew 86% year-on-year, with orders on hand reaching RMB 3 billion, 64% of which comes from the AI computing sector. Goldman Sachs believes this will provide strong support for VeriSilicon’s continued strong performance, especially in the accelerated growth of custom chip design and IP licensing business for smart cars and AI terminals.

Currently, VeriSilicon is proactively expanding AI cloud and edge computing ASIC projects, with its order structure tilting towards high-growth areas, improving the sustainability and anti-cyclicality of the company’s revenues.

Acquisition of Nuclei Completes Product Map and Expands Downstream Smart Scenarios

To further strengthen its comprehensive technological capabilities, VeriSilicon announced a strategic acquisition plan in September, targeting domestic RISC-V CPU IP supplier—Nuclei Technology. The acquisition will be conducted through issuance of shares and cash payments, with the cash proportion not exceeding 30% of the company’s total share capital.

As a pioneer and leading enterprise in China’s RISC-V IP field, Nuclei Technology’s products are widely applied in AI, automotive electronics, IoT and other fields, with gross margins for its RISC-V IP licensing services exceeding 90%. This acquisition will enhance VeriSilicon’s position in the RISC-V arena, and is expected to accelerate the industrialization of RISC-V technology through technical synergy.

The issue price for this transaction reflects the market’s recognition of VeriSilicon’s long-term value. As a leading AI ASIC company, VeriSilicon's order backlog has hit new highs for seven consecutive quarters, and orders related to AI computing power account for over 60%, showing the company’s strong growth momentum benefiting from improved computing power.

Goldman Sachs believes that this acquisition will fill VeriSilicon’s gap in CPU IP, making its IP portfolio (already covering GPU/NPU/ISP, etc.) more complete. This will significantly enhance VeriSilicon’s ability to empower smart cars and AI devices (such as AI toys, AI tablets, etc.), further consolidating its position as a one-stop chip solution provider and effectively driving growth in customer spending.

Short-term Profit Forecast Lowered, Long-term Growth Momentum Remains Strong

In terms of earnings forecast revisions, Goldman Sachs revised its 2025 net profit forecast from RMB 139 million to a loss of RMB 18 million, mainly due to an increase in the R&D expense ratio to 47%. However, as revenue scale expands and efficiency improves, net profit forecasts for 2026-2030 have been raised by 2% to 7% respectively.

For revenue forecasts, the annual projections for 2027-2030 have been slightly raised each year, mainly due to better prospects for AI-related chip design services and semiconductor IP revenue. Gross profit margin is also expected to increase during the same period, with gross margin rising by 1-2 percentage points in 2029-2030, and operating and net margins lifted to 28%-30% and 26%-29% respectively, indicating systemic improvement in profitability quality.

Goldman Sachs uses a 2029 P/E multiple of 46x for discounted valuation, raising the target price to RMB 220, nearly 20% above the current market price. This upward revision is based on peer 2027 earnings growth and 2026 valuation comparisons, reflecting the market’s optimistic view on the AI chip and semiconductor IP sectors. The 2026 price-sales ratio valuation is 23x, near the high end of the company’s historical range.

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