Macquarie's recent report highlights a favorable investment climate for China's AI chip sector, citing advancements in artificial intelligence and government backing as key factors. The analysts noted that import restrictions on Nvidia GPUs have enhanced the growth prospects for domestic firms.
They initiated coverage on five companies, with Cambricon being their top pick, rated outperform, and a price target of 2,060 yuan ($303.43), suggesting over 50% upside from its recent close. Biren Tech is also favored, with a price target of 140 Hong Kong dollars ($17.85), more than double its last close, due to its strong product portfolio and focus on the domestic supply chain.
Other companies mentioned include Iluvatar CoreX and MetaX, while Hygon is rated underperform due to concerns about its market position. The report underscores Huawei's dominance in AI chip shipments, with Cambricon and Hygon trailing behind. This analysis indicates a significant shift in the investment landscape for AI chips in China, making it a sector to watch for potential growth