One of China’s top chip makers, Cambricon Technologies, recently told investors to be cautious after their share price jumped sharply. In just one month, the stock market price of Cambricon increased, which excited a lot of investors, and they also got some new investors, but this also creates a Chinese AI chip firm risk warning. This may be overheating. The AI chip designer Cambricon Technologies also gave the warning to their investors that this much raise can also be the biggest loss. To keep the AI infrastructure investment in China. On the safe side, Cambricon gave the warning itself, so the investors can take action wisely.
Growth or Overvaluation?
AI chip designer Cambricon Technologies is no longer a typical player; it has become a key player in the chip industry, achieving this growth at a rapid pace. In the first half of 2025, revenue jumped to 2.88 billion yuan, which is an increase of more than 4,000% compared to last year. The total profit they have made till now is more than 1.04 billion yuan.
Now, the other side is a Chinese AI chip firm’s risk warning. It is also there; experts said that excitement will not last for much longer. They said the stock price is rising much more than the overall performance, and it happened mainly because of the hype that is going on right now, and this usually doesn’t last for a long time.
Reasons for the Cambricon Technologies Hype
Reasons for the Cambricon Technologies Hype are many but here are some main ones:-
- Global Chip Tension: US export restrictions on Chinese chips like Nvidia’s H20 made the door open for some other alternative. Cambricon chips are less powerful, which makes them a good option to go for.
- Government Backing: China’s drive for tech independence and partnering with famous big companies, such as DeepSeek, Tencent, and Alibaba, helped Cambricon because this helped investors regain confidence in the Shanghai-listed AI company Cambricon.
Chinese AI chip firm risk warning Behind the Hype
- No new product soon: There are a lot of rumours going on, which is also behind the Chinese AI chip firm’s risk warning. There are rumours of new chips, which are completely false and can lead to a totally wasted investment.
- Weak supply chain: Cambricon is famous for the chips, but there is also the fact that it does not make its own chips. It depends on SMIC, so it stays vulnerable, as it’s on the US trade blacklist. This supply chain can become weaker in the future, so the risk factors are also there.
- High valuation: The stock prices are also not easy to buy; they are extremely expensive. If someone is buying them, it means they are trusting them, and the Shanghai-listed AI company Cambricon doesn’t want to break their client’s trust by giving fake hopes.
- Few customers: Many businesses come from a very small group of state-linked clients, and this whole scenario makes it risky if the demand changes.
Bigger Picture: AI Hype vs. Reality
Cambricon is a great example of how AI stories and global politics can create so much hype about something that it will double in just one month. China’s AI chip industry is growing rapidly with the help of the government, but turning the hype into constant growth can be a bit challenging. There are a few things that Cambricon needs to do; they have to reduce production and attract more clients. Chinese AI chip firm’s risk warning has already made a few investors alert, and now the future growth will talk about the real position of Cambricon in the chip industry.
