In recent weeks, Cambrian has exhibited a rapid acceleration in its stock price, defying any hesitation among investors despite the inflated valuations
Throughout the year, Cambrian's stock has experienced approximately a staggering 400% increase, overwhelmingly surpassing the annual growth rates of tech titans such as Nvidia (NVDA.US) and Broadcom (AVGO.US). While the domestic AI industry continues its pursuit of excellence, the fervor for stock investments significantly outpaces the enthusiasm across the Pacific.
It's noteworthy that Broadcom's stock recently soared, leading the tech sector to reach a market capitalization of over one trillion dollars, firmly establishing it as a major player within the global AI chip marketThis remarkable success is attributed to the company's relentless innovation and advancements in ASIC chip technology.
The landscape of mainstream AI chips currently comprises three primary categories: general-purpose chips exemplified by GPUs, specialized chips represented by ASICs, and semi-custom chips symbolized by FPGAs
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Among these, Nvidia is the leading contender in the GPU space, while Broadcom stands out in the ASIC domain.
The appeal of ASIC chips lies in their tailored designs, which allows for exceptional performance in processing specific algorithmsCoupled with their advantageous cost-performance ratio and energy efficiency, they have garnered significant interest from tech giantsCurrently, major firms such as Google, Meta, and Apple are actively pursuing the development of ASIC technology.
Many industry analysts predict that as large-scale AI model deployments become more commonplace, the demand for computing power will swiftly pivot from pre-training towards inference operations, thereby leading to an expansion in diverse inference needs
This trend is expected to result in a growing demand for customized chipsWithin the next few years, it's anticipated that ASICs will experience a growth rate surpassing that of GPUs, making them a new favorite in the market.
As a pioneer in the domestic AI chip design sphere, Cambrian Technologies has consistently focused on the development of AI inference chipsCurrently, their ASIC chips are being implemented across various AI computing scenarios, and the company’s stock price uptrend can potentially be correlated with the heightened market interest in ASICs.
Furthermore, Cambrian’s recent streak of new highs may be linked to the surging demand within the domestic AI sector.
ByteDance's AI model, Doubao, has recently become a global top contender with its monthly active users, highlighting the bright future of domestic AI
Recently, the company updated its extensive AI offerings, reigniting external interest in AI computing hardwareReports indicate that ByteDance's capital expenditure budget is projected to soar to nearly 160 billion yuan by 2025, primarily allocated toward AI computing procurement and IDC infrastructure, underscoring its commitment to a large-scale presence in the AI domain.
Market watchers anticipate that, given ByteDance's focus on AI, other internet giants will likely follow suit, thereby opening up expansive possibilities in the upstream infrastructure, particularly in the AI chip segmentAs the first AI chip company listed on the Science and Technology Innovation Board, Cambrian's potential space is vast.
Despite the optimistic vision of Cambrian Technologies, many investors have expressed skepticism over the company's fundamentals, viewing them as misaligned with its market valuation and stock price.
In the first three quarters of this year, Cambrian reported revenues of only 185 million yuan, with a net profit attributable to shareholders at a loss of 724 million yuan
The company has faced continuous financial setbacks, with net profits for the years 2019 through 2023 showing losses of 1.179 billion yuan, 435 million yuan, 825 million yuan, 1.256 billion yuan, and 848 million yuan respectivelyLooking ahead, it appears there are no signs of a turnaround in 2024.
While Cambrian Technologies' performance is clouded with “chills,” its valuation remains incredibly heatedCurrently, the company's price-to-book ratio stands at about 55 times, far exceeding the average valuation levels within the semiconductor industryFrom this perspective, the institution's commitment to Cambrian surpasses even previous frenzies observed in sectors like liquor, pharmaceuticals, and new energy.
Computational power has become the “entry ticket” for technology giants to engage in the AI arms race