Nvidia Rival Cambricon Plunges Nearly 12% In Shanghai Following August Rally, Index Rebalancing Concerns
Shanghai, China – Shares of Cambricon Technologies, a Chinese artificial intelligence chip designer adn rival to Nvidia, plummeted nearly 12% in Shanghai trading today as profit-taking intensified following a dramatic surge in August. The decline reflects broader investor caution ahead of a key index rebalancing and growing regulatory scrutiny of China’s rapidly rising stock market.
Cambricon’s weight in the tech-focused STAR50 Index swelled to 15% during august’s rally, exceeding the 10% cap for individual stocks. This breach triggers concerns about a mandatory rebalancing scheduled for September 12,according to Reuters. The anticipated adjustment contributed to a widespread selloff, dragging onshore semiconductor shares down almost 6% and pulling the STAR50 Index down over 5%.
Last week, Cambricon cautioned investors about its soaring share price in a stock exchange filing, aiming to curb speculative buying. the company’s warning came after reporting a 4,000% year-over-year increase in first-half revenue,reaching $403.8 million – its strongest performance since its 2020 initial public offering.
The pullback in Cambricon shares also comes amid reports that Chinese regulators are considering measures to cool the overall stock market, fueled by concerns over the rapid gains seen since early August. The CSI300 Index has risen 10% in the last month, prompting increased regulatory attention to the technology sector.
China’s tech and AI stocks have been the primary drivers of the country’s market gains this year, with the STAR50 Index up 26% and AI shares climbing 47% year-to-date. The situation highlights the delicate balance between fostering innovation and managing systemic risk in the world’s second-largest economy.